Correlation Between Grown Rogue and Silver Spike

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

By analyzing existing cross correlation between Grown Rogue International and Silver Spike Investment, you can compare the effects of market volatilities on Grown Rogue and Silver Spike 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 Grown Rogue with a short position of Silver Spike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grown Rogue and Silver Spike.

Diversification Opportunities for Grown Rogue and Silver Spike

-0.16

Correlation Coefficient

Grown Rogue  Silver Spike

Good diversification

The 3 months correlation between Grown and Silver is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Grown Rogue International and Silver Spike Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Spike Investment and Grown Rogue 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 Grown Rogue International are associated (or correlated) with Silver Spike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Spike Investment has no effect on the direction of Grown Rogue i.e., Grown Rogue and Silver Spike go up and down completely randomly.

Pair Corralation between Grown Rogue and Silver Spike

Assuming the 90 days horizon Grown Rogue International is expected to generate 2.23 times more return on investment than Silver Spike. However, Grown Rogue is 2.23 times more volatile than Silver Spike Investment. It trades about 0.15 of its potential returns per unit of risk. Silver Spike Investment is currently generating about 0.02 per unit of risk. If you would invest  62.00  in Grown Rogue International on September 12, 2024 and sell it today you would earn a total of  5.00  from holding Grown Rogue International or generate 8.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

Grown Rogue International  vs.  Silver Spike Investment

Grown Rogue International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grown Rogue International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Grown Rogue may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Silver Spike Investment

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Silver Spike Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather fragile forward indicators, Silver Spike exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grown Rogue and Silver Spike

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

The idea behind Grown Rogue International and Silver Spike Investment 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.