Correlation Between GelStat Corp and Green Thumb

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

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

Diversification Opportunities for GelStat Corp and Green Thumb

0.09

Correlation Coefficient

GelStat Corp  Green Thumb

Significant diversification

The 3 months correlation between GelStat and Green is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding GelStat Corp and Green Thumb Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Thumb Industries and GelStat Corp 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 GelStat Corp are associated (or correlated) with Green Thumb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Thumb Industries has no effect on the direction of GelStat Corp i.e., GelStat Corp and Green Thumb go up and down completely randomly.

Pair Corralation between GelStat Corp and Green Thumb

Given the investment horizon of 90 days GelStat Corp is expected to generate 3.66 times more return on investment than Green Thumb. However, GelStat Corp is 3.66 times more volatile than Green Thumb Industries. It trades about 0.05 of its potential returns per unit of risk. Green Thumb Industries is currently generating about -0.16 per unit of risk. If you would invest  0.03  in GelStat Corp on December 29, 2024 and sell it today you would earn a total of  0.00  from holding GelStat Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

GelStat Corp  vs.  Green Thumb Industries

GelStat Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GelStat Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, GelStat Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Green Thumb Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Green Thumb Industries 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 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.

Pair Trading with GelStat Corp and Green Thumb

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

The idea behind GelStat Corp and Green Thumb Industries 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.