Correlation Between Entourage Health and Pure Harvest

Can any of the company-specific risk be diversified away by investing in both Entourage Health and Pure Harvest 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 Entourage Health and Pure Harvest into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Entourage Health Corp and Pure Harvest Cannabis, you can compare the effects of market volatilities on Entourage Health and Pure Harvest 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 Entourage Health with a short position of Pure Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entourage Health and Pure Harvest.

Diversification Opportunities for Entourage Health and Pure Harvest

0.25

Correlation Coefficient

Entourage Health  Pure Harvest

Modest diversification

The 3 months correlation between Entourage and Pure is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Entourage Health Corp and Pure Harvest Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Harvest Cannabis and Entourage Health 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 Entourage Health Corp are associated (or correlated) with Pure Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Harvest Cannabis has no effect on the direction of Entourage Health i.e., Entourage Health and Pure Harvest go up and down completely randomly.

Pair Corralation between Entourage Health and Pure Harvest

Assuming the 90 days horizon Entourage Health Corp is expected to under-perform the Pure Harvest. But the pink sheet apears to be less risky and, when comparing its historical volatility, Entourage Health Corp is 1.5 times less risky than Pure Harvest. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Pure Harvest Cannabis is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.30  in Pure Harvest Cannabis on December 20, 2024 and sell it today you would earn a total of  0.04  from holding Pure Harvest Cannabis or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Entourage Health Corp  vs.  Pure Harvest Cannabis

Entourage Health Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entourage Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pure Harvest Cannabis

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pure Harvest Cannabis are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Pure Harvest reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Entourage Health and Pure Harvest

The main advantage of trading using opposite Entourage Health and Pure Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entourage Health position performs unexpectedly, Pure Harvest 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 Pure Harvest will offset losses from the drop in Pure Harvest's long position.

The idea behind Entourage Health Corp and Pure Harvest Cannabis 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.

Check out your portfolio center.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.