Correlation Between Growlife and Creative Edge

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

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

Diversification Opportunities for Growlife and Creative Edge

0.0

Correlation Coefficient

Growlife  Creative Edge

Pay attention - limited upside

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

Pair Corralation between Growlife and Creative Edge

If you would invest  0.01  in Growlife on December 30, 2024 and sell it today you would earn a total of  0.01  from holding Growlife or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

Growlife  vs.  Creative Edge Nutrit

Growlife

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Growlife are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Growlife unveiled solid returns over the last few months and may actually be approaching a breakup point.

Creative Edge Nutrit

Risk-Adjusted Performance

Very Weak

Over the last 90 days Creative Edge Nutrit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Creative Edge is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Growlife and Creative Edge

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

The idea behind Growlife and Creative Edge Nutrit 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.