Correlation Between Grown Rogue and CV Sciences

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

By analyzing existing cross correlation between Grown Rogue International and CV Sciences, you can compare the effects of market volatilities on Grown Rogue and CV Sciences 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 Grown Rogue with a short position of CV Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grown Rogue and CV Sciences.

Diversification Opportunities for Grown Rogue and CV Sciences

0.14

Correlation Coefficient

Grown Rogue  CV Sciences

Average diversification

The 3 months correlation between Grown and CVSI is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Grown Rogue International and CV Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CV Sciences and Grown Rogue 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 Grown Rogue International are associated (or correlated) with CV Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CV Sciences has no effect on the direction of Grown Rogue i.e., Grown Rogue and CV Sciences go up and down completely randomly.

Pair Corralation between Grown Rogue and CV Sciences

Assuming the 90 days horizon Grown Rogue International is expected to generate 0.37 times more return on investment than CV Sciences. However, Grown Rogue International is 2.69 times less risky than CV Sciences. It trades about 0.01 of its potential returns per unit of risk. CV Sciences is currently generating about 0.0 per unit of risk. If you would invest  66.00  in Grown Rogue International on September 20, 2024 and sell it today you would lose (1.00) from holding Grown Rogue International or give up 1.52% of portfolio value over 90 days.

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

Grown Rogue International  vs.  CV Sciences

Grown Rogue International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grown Rogue International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Grown Rogue is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CV Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CV Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, CV Sciences is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Grown Rogue and CV Sciences

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

The idea behind Grown Rogue International and CV Sciences 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.