Correlation Between 1 800 and High Tide

Can any of the company-specific risk be diversified away by investing in both 1 800 and High Tide 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 1 800 and High Tide into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1 800 FLOWERSCOM and High Tide, you can compare the effects of market volatilities on 1 800 and High Tide 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 1 800 with a short position of High Tide. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1 800 and High Tide.

Diversification Opportunities for 1 800 and High Tide

0.22

Correlation Coefficient

1 800  High Tide

Modest diversification

The 3 months correlation between FLWS and High is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding 1 800 FLOWERSCOM and High Tide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Tide and 1 800 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 1 800 FLOWERSCOM are associated (or correlated) with High Tide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Tide has no effect on the direction of 1 800 i.e., 1 800 and High Tide go up and down completely randomly.

Pair Corralation between 1 800 and High Tide

Given the investment horizon of 90 days 1 800 is expected to generate 16.18 times less return on investment than High Tide. But when comparing it to its historical volatility, 1 800 FLOWERSCOM is 1.69 times less risky than High Tide. It trades about 0.02 of its potential returns per unit of risk. High Tide is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  219.00  in High Tide on September 16, 2024 and sell it today you would earn a total of  100.00  from holding High Tide or generate 45.66% return on investment over 90 days.

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

1 800 FLOWERSCOM  vs.  High Tide

1 800 FLOWERSCOM

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 1 800 FLOWERSCOM are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, 1 800 is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

High Tide

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in High Tide are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, High Tide demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 1 800 and High Tide

The main advantage of trading using opposite 1 800 and High Tide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1 800 position performs unexpectedly, High Tide 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 High Tide will offset losses from the drop in High Tide's long position.

The idea behind 1 800 FLOWERSCOM and High Tide 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.