Correlation Between Petros Pharmaceuticals and Grown Rogue

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

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

Diversification Opportunities for Petros Pharmaceuticals and Grown Rogue

-0.27

Correlation Coefficient

Petros Pharmaceuticals  Grown Rogue

Very good diversification

The 3 months correlation between Petros and Grown is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Petros Pharmaceuticals and Grown Rogue International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grown Rogue International and Petros Pharmaceuticals 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 Petros Pharmaceuticals are associated (or correlated) with Grown Rogue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grown Rogue International has no effect on the direction of Petros Pharmaceuticals i.e., Petros Pharmaceuticals and Grown Rogue go up and down completely randomly.

Pair Corralation between Petros Pharmaceuticals and Grown Rogue

Given the investment horizon of 90 days Petros Pharmaceuticals is expected to generate 1.51 times less return on investment than Grown Rogue. In addition to that, Petros Pharmaceuticals is 2.88 times more volatile than Grown Rogue International. It trades about 0.02 of its total potential returns per unit of risk. Grown Rogue International is currently generating about 0.08 per unit of volatility. If you would invest  12.00  in Grown Rogue International on October 11, 2024 and sell it today you would earn a total of  51.00  from holding Grown Rogue International or generate 425.0% return on investment over 90 days.

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

Petros Pharmaceuticals  vs.  Grown Rogue International

Petros Pharmaceuticals

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Petros Pharmaceuticals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Petros Pharmaceuticals demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Grown Rogue International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grown Rogue International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Petros Pharmaceuticals and Grown Rogue

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

The idea behind Petros Pharmaceuticals and Grown Rogue International 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.