Correlation Between Flower One and Benchmark Botanics

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

By analyzing existing cross correlation between Flower One Holdings and Benchmark Botanics, you can compare the effects of market volatilities on Flower One and Benchmark Botanics 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 Flower One with a short position of Benchmark Botanics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flower One and Benchmark Botanics.

Diversification Opportunities for Flower One and Benchmark Botanics

0.0

Correlation Coefficient

Flower One  Benchmark Botanics

Pay attention - limited upside

The 3 months correlation between Flower and Benchmark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Flower One Holdings and Benchmark Botanics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Botanics and Flower One 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 Flower One Holdings are associated (or correlated) with Benchmark Botanics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Botanics has no effect on the direction of Flower One i.e., Flower One and Benchmark Botanics go up and down completely randomly.

Pair Corralation between Flower One and Benchmark Botanics

If you would invest  0.00  in Flower One Holdings on December 4, 2024 and sell it today you would earn a total of  0.00  from holding Flower One Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Flower One Holdings  vs.  Benchmark Botanics

Flower One Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flower One Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Flower One is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Benchmark Botanics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Benchmark Botanics 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 forward-looking signals 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.

Pair Trading with Flower One and Benchmark Botanics

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

The idea behind Flower One Holdings and Benchmark Botanics 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.