Correlation Between Ionic Brands and Lowell Farms

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

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

Diversification Opportunities for Ionic Brands and Lowell Farms

0.0

Correlation Coefficient

Ionic Brands  Lowell Farms

Pay attention - limited upside

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

Pair Corralation between Ionic Brands and Lowell Farms

If you would invest  1.40  in Lowell Farms on September 20, 2024 and sell it today you would lose (0.10) from holding Lowell Farms or give up 7.14% of portfolio value over 90 days.

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

Ionic Brands Corp  vs.  Lowell Farms

Ionic Brands Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lowell Farms

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lowell Farms are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Lowell Farms reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ionic Brands and Lowell Farms

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

The idea behind Ionic Brands Corp and Lowell Farms 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.