Correlation Between Flora Growth and Tharimmune

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

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

Diversification Opportunities for Flora Growth and Tharimmune

0.61

Correlation Coefficient

Flora Growth  Tharimmune

Poor diversification

The 3 months correlation between Flora and Tharimmune is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Flora Growth Corp and Tharimmune in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tharimmune and Flora Growth 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 Flora Growth Corp are associated (or correlated) with Tharimmune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tharimmune has no effect on the direction of Flora Growth i.e., Flora Growth and Tharimmune go up and down completely randomly.

Pair Corralation between Flora Growth and Tharimmune

Given the investment horizon of 90 days Flora Growth Corp is expected to under-perform the Tharimmune. In addition to that, Flora Growth is 1.66 times more volatile than Tharimmune. It trades about -0.16 of its total potential returns per unit of risk. Tharimmune is currently generating about -0.15 per unit of volatility. If you would invest  221.00  in Tharimmune on December 2, 2024 and sell it today you would lose (78.00) from holding Tharimmune or give up 35.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Flora Growth Corp  vs.  Tharimmune

Flora Growth Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flora Growth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Tharimmune

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tharimmune has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Flora Growth and Tharimmune

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

The idea behind Flora Growth Corp and Tharimmune 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.