Correlation Between Cingulate Warrants and Flora Growth

Can any of the company-specific risk be diversified away by investing in both Cingulate Warrants and Flora Growth at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cingulate Warrants and Flora Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cingulate Warrants and Flora Growth Corp, you can compare the effects of market volatilities on Cingulate Warrants and Flora Growth and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cingulate Warrants with a short position of Flora Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cingulate Warrants and Flora Growth.

Diversification Opportunities for Cingulate Warrants and Flora Growth

0.07

Correlation Coefficient

Cingulate Warrants  Flora Growth

Significant diversification

The 3 months correlation between Cingulate and Flora is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cingulate Warrants and Flora Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flora Growth Corp and Cingulate Warrants is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cingulate Warrants are associated (or correlated) with Flora Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flora Growth Corp has no effect on the direction of Cingulate Warrants i.e., Cingulate Warrants and Flora Growth go up and down completely randomly.

Pair Corralation between Cingulate Warrants and Flora Growth

Assuming the 90 days horizon Cingulate Warrants is expected to generate 12.41 times more return on investment than Flora Growth. However, Cingulate Warrants is 12.41 times more volatile than Flora Growth Corp. It trades about 0.12 of its potential returns per unit of risk. Flora Growth Corp is currently generating about 0.01 per unit of risk. If you would invest  26.00  in Cingulate Warrants on September 5, 2024 and sell it today you would lose (21.15) from holding Cingulate Warrants or give up 81.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	74.95%
Values	Daily Returns

Cingulate Warrants  vs.  Flora Growth Corp

Cingulate Warrants

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cingulate Warrants are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Cingulate Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Flora Growth Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flora Growth Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Flora Growth exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cingulate Warrants and Flora Growth

The main advantage of trading using opposite Cingulate Warrants and Flora Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cingulate Warrants position performs unexpectedly, Flora Growth can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Flora Growth will offset losses from the drop in Flora Growth's long position.

The idea behind Cingulate Warrants and Flora Growth Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.