Correlation Between Cresco Labs and Delivra Health

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

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

Diversification Opportunities for Cresco Labs and Delivra Health

0.82

Correlation Coefficient

Cresco Labs  Delivra Health

Very poor diversification

The 3 months correlation between Cresco and Delivra is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cresco Labs and Delivra Health Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delivra Health Brands and Cresco Labs 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 Cresco Labs are associated (or correlated) with Delivra Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delivra Health Brands has no effect on the direction of Cresco Labs i.e., Cresco Labs and Delivra Health go up and down completely randomly.

Pair Corralation between Cresco Labs and Delivra Health

Assuming the 90 days horizon Cresco Labs is expected to under-perform the Delivra Health. But the otc stock apears to be less risky and, when comparing its historical volatility, Cresco Labs is 1.55 times less risky than Delivra Health. The otc stock trades about -0.11 of its potential returns per unit of risk. The Delivra Health Brands is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1.73  in Delivra Health Brands on September 20, 2024 and sell it today you would lose (0.63) from holding Delivra Health Brands or give up 36.42% of portfolio value over 90 days.

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

Cresco Labs  vs.  Delivra Health Brands

Cresco Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cresco Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Delivra Health Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delivra Health Brands 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 basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cresco Labs and Delivra Health

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

The idea behind Cresco Labs and Delivra Health Brands 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.