Correlation Between Easton Pharmaceutica and Lowell Farms

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Can any of the company-specific risk be diversified away by investing in both Easton Pharmaceutica and Lowell Farms 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 Easton Pharmaceutica and Lowell Farms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easton Pharmaceutica and Lowell Farms, you can compare the effects of market volatilities on Easton Pharmaceutica and Lowell Farms 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 Easton Pharmaceutica with a short position of Lowell Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easton Pharmaceutica and Lowell Farms.

Diversification Opportunities for Easton Pharmaceutica and Lowell Farms

EastonLowellDiversified AwayEastonLowellDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Easton Pharmaceutica and Lowell Farms

If you would invest  1.40  in Lowell Farms on September 24, 2024 and sell it today you would earn a total of  0.40  from holding Lowell Farms or generate 28.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Easton Pharmaceutica  vs.  Lowell Farms

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -40-20020
JavaScript chart by amCharts 3.21.15EAPH LOWLF
       Timeline  
Easton Pharmaceutica 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Easton Pharmaceutica has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Easton Pharmaceutica is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.00010.0001050.000110.000115
Lowell Farms 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lowell Farms are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, Lowell Farms reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.010.0150.020.0250.03

Easton Pharmaceutica and Lowell Farms Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.00020.00040.00060.0008
JavaScript chart by amCharts 3.21.15EAPH LOWLF
       Returns  

Pair Trading with Easton Pharmaceutica and Lowell Farms

The main advantage of trading using opposite Easton Pharmaceutica and Lowell Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easton Pharmaceutica position performs unexpectedly, Lowell Farms 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 Lowell Farms will offset losses from the drop in Lowell Farms' long position.
The idea behind Easton Pharmaceutica and Lowell Farms 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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