Correlation Between Medmen Enterprises and Guardion Health

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

By analyzing existing cross correlation between Medmen Enterprises Class and Guardion Health Sciences, you can compare the effects of market volatilities on Medmen Enterprises and Guardion Health 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 Medmen Enterprises with a short position of Guardion Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medmen Enterprises and Guardion Health.

Diversification Opportunities for Medmen Enterprises and Guardion Health

0.61

Correlation Coefficient

Medmen Enterprises  Guardion Health

Poor diversification

The 3 months correlation between Medmen and Guardion is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Medmen Enterprises Class and Guardion Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardion Health Sciences and Medmen Enterprises 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 Medmen Enterprises Class are associated (or correlated) with Guardion Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardion Health Sciences has no effect on the direction of Medmen Enterprises i.e., Medmen Enterprises and Guardion Health go up and down completely randomly.

Pair Corralation between Medmen Enterprises and Guardion Health

If you would invest  0.01  in Medmen Enterprises Class on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Medmen Enterprises Class or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	3.57%
Values	Daily Returns

Medmen Enterprises Class  vs.  Guardion Health Sciences

Medmen Enterprises Class

Risk-Adjusted Performance

0 of 100

Very Weak

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

Guardion Health Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guardion Health Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Medmen Enterprises and Guardion Health

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

The idea behind Medmen Enterprises Class and Guardion Health 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.