Correlation Between YourWay Cannabis and Biome Grow

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

By analyzing existing cross correlation between YourWay Cannabis Brands and Biome Grow, you can compare the effects of market volatilities on YourWay Cannabis and Biome Grow 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 YourWay Cannabis with a short position of Biome Grow. Check out your portfolio center. Please also check ongoing floating volatility patterns of YourWay Cannabis and Biome Grow.

Diversification Opportunities for YourWay Cannabis and Biome Grow

0.0

Correlation Coefficient

YourWay Cannabis  Biome Grow

Pay attention - limited upside

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

Pair Corralation between YourWay Cannabis and Biome Grow

If you would invest  0.38  in Biome Grow on October 4, 2024 and sell it today you would earn a total of  0.26  from holding Biome Grow or generate 68.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

YourWay Cannabis Brands  vs.  Biome Grow

YourWay Cannabis Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YourWay Cannabis Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, YourWay Cannabis is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Biome Grow

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biome Grow are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Biome Grow reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YourWay Cannabis and Biome Grow

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

The idea behind YourWay Cannabis Brands and Biome Grow 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.