Correlation Between Green Thumb and Stem Holdings

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Green Thumb and Stem Holdings 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 Green Thumb and Stem Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Thumb Industries and Stem Holdings, you can compare the effects of market volatilities on Green Thumb and Stem Holdings 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 Green Thumb with a short position of Stem Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Thumb and Stem Holdings.

Diversification Opportunities for Green Thumb and Stem Holdings

GreenStemDiversified AwayGreenStemDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Green Thumb and Stem Holdings

If you would invest  1.00  in Stem Holdings on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Stem Holdings or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Green Thumb Industries  vs.  Stem Holdings

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -25-20-15-10-50510
JavaScript chart by amCharts 3.21.15GTBIF STMH
       Timeline  
Green Thumb Industries 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Green Thumb Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec7.588.599.51010.51111.5
Stem Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Stem Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Stem Holdings is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.010.0105

Green Thumb and Stem Holdings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.82-5.11-3.39-1.680.01.593.184.766.35 0.0050.0100.0150.020
JavaScript chart by amCharts 3.21.15GTBIF STMH
       Returns  

Pair Trading with Green Thumb and Stem Holdings

The main advantage of trading using opposite Green Thumb and Stem Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Thumb position performs unexpectedly, Stem Holdings 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 Stem Holdings will offset losses from the drop in Stem Holdings' long position.
The idea behind Green Thumb Industries and Stem 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.
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

Other Complementary Tools

Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
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
Share Portfolio
Track or share privately all of your investments from the convenience of any device


 

Discover investing ideas

Utilize additional investing modules