Correlation Between Green Thumb and Ascend Wellness
Can any of the company-specific risk be diversified away by investing in both Green Thumb and Ascend Wellness 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 Green Thumb and Ascend Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Thumb Industries and Ascend Wellness Holdings, you can compare the effects of market volatilities on Green Thumb and Ascend Wellness 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 Green Thumb with a short position of Ascend Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Thumb and Ascend Wellness.
Diversification Opportunities for Green Thumb and Ascend Wellness
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Green and Ascend is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Green Thumb Industries and Ascend Wellness Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascend Wellness Holdings and Green Thumb 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 Green Thumb Industries are associated (or correlated) with Ascend Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascend Wellness Holdings has no effect on the direction of Green Thumb i.e., Green Thumb and Ascend Wellness go up and down completely randomly.
Pair Corralation between Green Thumb and Ascend Wellness
Assuming the 90 days horizon Green Thumb Industries is expected to under-perform the Ascend Wellness. But the otc stock apears to be less risky and, when comparing its historical volatility, Green Thumb Industries is 1.77 times less risky than Ascend Wellness. The otc stock trades about -0.21 of its potential returns per unit of risk. The Ascend Wellness Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Ascend Wellness Holdings on December 28, 2024 and sell it today you would lose (2.00) from holding Ascend Wellness Holdings or give up 5.56% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Green Thumb Industries vs. Ascend Wellness Holdings
Performance |
Timeline |
Green Thumb Industries |
Ascend Wellness Holdings |
Green Thumb and Ascend Wellness Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Green Thumb and Ascend Wellness
The main advantage of trading using opposite Green Thumb and Ascend Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Thumb position performs unexpectedly, Ascend Wellness 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 Ascend Wellness will offset losses from the drop in Ascend Wellness' long position.Green Thumb vs. Curaleaf Holdings | Green Thumb vs. Trulieve Cannabis Corp | Green Thumb vs. Cresco Labs | Green Thumb vs. GrowGeneration Corp |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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