Correlation Between Easton Pharmaceutica and Growlife

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

By analyzing existing cross correlation between Easton Pharmaceutica and Growlife, you can compare the effects of market volatilities on Easton Pharmaceutica and Growlife 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 Growlife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easton Pharmaceutica and Growlife.

Diversification Opportunities for Easton Pharmaceutica and Growlife

0.0

Correlation Coefficient

Easton Pharmaceutica  Growlife

Pay attention - limited upside

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

Pair Corralation between Easton Pharmaceutica and Growlife

If you would invest  0.03  in Growlife on September 25, 2024 and sell it today you would lose (0.02) from holding Growlife or give up 66.67% of portfolio value over 90 days.

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

Easton Pharmaceutica  vs.  Growlife

Easton Pharmaceutica

Risk-Adjusted Performance

0 of 100

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.

Growlife

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Growlife are ranked lower than 8 (%) 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.

Pair Trading with Easton Pharmaceutica and Growlife

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

The idea behind Easton Pharmaceutica and Growlife 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.