Correlation Between Sunniva and Lowell Farms

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

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

Diversification Opportunities for Sunniva and Lowell Farms

0.0

Correlation Coefficient

Sunniva  Lowell Farms

Pay attention - limited upside

The 3 months correlation between Sunniva and Lowell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sunniva and Lowell Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowell Farms and Sunniva 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 Sunniva 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 Sunniva i.e., Sunniva and Lowell Farms go up and down completely randomly.

Pair Corralation between Sunniva and Lowell Farms

If you would invest  0.00  in Sunniva on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Sunniva or generate 0.0% return on investment over 90 days.

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

Sunniva  vs.  Lowell Farms

Sunniva

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lowell Farms

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lowell Farms are ranked lower than 4 (%) 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 Sunniva and Lowell Farms

The main advantage of trading using opposite Sunniva and Lowell Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunniva 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 Sunniva 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.