Correlation Between 4Front Ventures and Ascend Wellness
Can any of the company-specific risk be diversified away by investing in both 4Front Ventures and Ascend Wellness 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 4Front Ventures and Ascend Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 4Front Ventures Corp and Ascend Wellness Holdings, you can compare the effects of market volatilities on 4Front Ventures and Ascend Wellness 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 4Front Ventures with a short position of Ascend Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4Front Ventures and Ascend Wellness.
Diversification Opportunities for 4Front Ventures and Ascend Wellness
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 4Front and Ascend is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding 4Front Ventures Corp and Ascend Wellness Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascend Wellness Holdings and 4Front Ventures 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 4Front Ventures Corp are associated (or correlated) with Ascend Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascend Wellness Holdings has no effect on the direction of 4Front Ventures i.e., 4Front Ventures and Ascend Wellness go up and down completely randomly.
Pair Corralation between 4Front Ventures and Ascend Wellness
Assuming the 90 days horizon 4Front Ventures Corp is expected to generate 1.97 times more return on investment than Ascend Wellness. However, 4Front Ventures is 1.97 times more volatile than Ascend Wellness Holdings. It trades about -0.1 of its potential returns per unit of risk. Ascend Wellness Holdings is currently generating about -0.21 per unit of risk. If you would invest 4.80 in 4Front Ventures Corp on September 13, 2024 and sell it today you would lose (3.28) from holding 4Front Ventures Corp or give up 68.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
4Front Ventures Corp vs. Ascend Wellness Holdings
Performance |
Timeline |
4Front Ventures Corp |
Ascend Wellness Holdings |
4Front Ventures and Ascend Wellness Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 4Front Ventures and Ascend Wellness
The main advantage of trading using opposite 4Front Ventures and Ascend Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4Front Ventures position performs unexpectedly, Ascend Wellness 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 Ascend Wellness will offset losses from the drop in Ascend Wellness' long position.4Front Ventures vs. Khiron Life Sciences | 4Front Ventures vs. BellRock Brands | 4Front Ventures vs. Elixinol Global |
Ascend Wellness vs. Verano Holdings Corp | Ascend Wellness vs. Green Thumb Industries | Ascend Wellness vs. AYR Strategies Class | Ascend Wellness vs. Trulieve Cannabis Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Content Syndication Quickly integrate customizable finance content to your own investment portal |