Correlation Between Harrow Health, and CbdMD

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

By analyzing existing cross correlation between Harrow Health, 11875 and cbdMD Inc, you can compare the effects of market volatilities on Harrow Health, and CbdMD 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 Harrow Health, with a short position of CbdMD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harrow Health, and CbdMD.

Diversification Opportunities for Harrow Health, and CbdMD

0.86

Correlation Coefficient

Harrow Health,  CbdMD

Very poor diversification

The 3 months correlation between Harrow and CbdMD is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Harrow Health, 11875 and cbdMD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cbdMD Inc and Harrow Health, 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 Harrow Health, 11875 are associated (or correlated) with CbdMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of cbdMD Inc has no effect on the direction of Harrow Health, i.e., Harrow Health, and CbdMD go up and down completely randomly.

Pair Corralation between Harrow Health, and CbdMD

Assuming the 90 days horizon Harrow Health, is expected to generate 12.71 times less return on investment than CbdMD. But when comparing it to its historical volatility, Harrow Health, 11875 is 10.12 times less risky than CbdMD. It trades about 0.1 of its potential returns per unit of risk. cbdMD Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  62.00  in cbdMD Inc on September 3, 2024 and sell it today you would earn a total of  18.00  from holding cbdMD Inc or generate 29.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	82.81%
Values	Daily Returns

Harrow Health, 11875  vs.  cbdMD Inc

Harrow Health, 11875

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harrow Health, 11875 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Harrow Health, is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

cbdMD Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in cbdMD Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, CbdMD sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harrow Health, and CbdMD

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

The idea behind Harrow Health, 11875 and cbdMD Inc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.