Correlation Between Purple Innovation and GrowGeneration Corp
Can any of the company-specific risk be diversified away by investing in both Purple Innovation and GrowGeneration Corp 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 Purple Innovation and GrowGeneration Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Purple Innovation and GrowGeneration Corp, you can compare the effects of market volatilities on Purple Innovation and GrowGeneration Corp 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 Purple Innovation with a short position of GrowGeneration Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Purple Innovation and GrowGeneration Corp.
Diversification Opportunities for Purple Innovation and GrowGeneration Corp
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Purple and GrowGeneration is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Purple Innovation and GrowGeneration Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrowGeneration Corp and Purple Innovation 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 Purple Innovation are associated (or correlated) with GrowGeneration Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrowGeneration Corp has no effect on the direction of Purple Innovation i.e., Purple Innovation and GrowGeneration Corp go up and down completely randomly.
Pair Corralation between Purple Innovation and GrowGeneration Corp
Given the investment horizon of 90 days Purple Innovation is expected to under-perform the GrowGeneration Corp. But the stock apears to be less risky and, when comparing its historical volatility, Purple Innovation is 1.42 times less risky than GrowGeneration Corp. The stock trades about -0.11 of its potential returns per unit of risk. The GrowGeneration Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 156.00 in GrowGeneration Corp on August 20, 2025 and sell it today you would earn a total of 9.00 from holding GrowGeneration Corp or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Purple Innovation vs. GrowGeneration Corp
Performance |
| Timeline |
| Purple Innovation |
| GrowGeneration Corp |
Purple Innovation and GrowGeneration Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Purple Innovation and GrowGeneration Corp
The main advantage of trading using opposite Purple Innovation and GrowGeneration Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Purple Innovation position performs unexpectedly, GrowGeneration Corp 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 GrowGeneration Corp will offset losses from the drop in GrowGeneration Corp's long position.| Purple Innovation vs. iRobot | Purple Innovation vs. Red Robin Gourmet | Purple Innovation vs. Full House Resorts | Purple Innovation vs. Luminar Technologies |
| GrowGeneration Corp vs. QVC Group | GrowGeneration Corp vs. Sportsmans | GrowGeneration Corp vs. TH International Limited | GrowGeneration Corp vs. Red Robin Gourmet |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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