Correlation Between GrowGeneration Corp and Charlottes Web

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

By analyzing existing cross correlation between GrowGeneration Corp and Charlottes Web Holdings, you can compare the effects of market volatilities on GrowGeneration Corp and Charlottes Web 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 GrowGeneration Corp with a short position of Charlottes Web. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrowGeneration Corp and Charlottes Web.

Diversification Opportunities for GrowGeneration Corp and Charlottes Web

0.0

Correlation Coefficient

GrowGeneration Corp  Charlottes Web

Pay attention - limited upside

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

Pair Corralation between GrowGeneration Corp and Charlottes Web

If you would invest  189.00  in GrowGeneration Corp on September 5, 2024 and sell it today you would earn a total of  12.00  from holding GrowGeneration Corp or generate 6.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

GrowGeneration Corp  vs.  Charlottes Web Holdings

GrowGeneration Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GrowGeneration Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, GrowGeneration Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Charlottes Web Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GrowGeneration Corp and Charlottes Web

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

The idea behind GrowGeneration Corp and Charlottes Web Holdings 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.