Correlation Between Ascend Wellness and Curaleaf Holdings
Can any of the company-specific risk be diversified away by investing in both Ascend Wellness and Curaleaf Holdings 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 Ascend Wellness and Curaleaf Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascend Wellness Holdings and Curaleaf Holdings, you can compare the effects of market volatilities on Ascend Wellness and Curaleaf Holdings 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 Ascend Wellness with a short position of Curaleaf Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascend Wellness and Curaleaf Holdings.
Diversification Opportunities for Ascend Wellness and Curaleaf Holdings
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ascend and Curaleaf is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ascend Wellness Holdings and Curaleaf Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curaleaf Holdings and Ascend Wellness 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 Ascend Wellness Holdings are associated (or correlated) with Curaleaf Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curaleaf Holdings has no effect on the direction of Ascend Wellness i.e., Ascend Wellness and Curaleaf Holdings go up and down completely randomly.
Pair Corralation between Ascend Wellness and Curaleaf Holdings
Given the investment horizon of 90 days Ascend Wellness Holdings is expected to under-perform the Curaleaf Holdings. But the otc stock apears to be less risky and, when comparing its historical volatility, Ascend Wellness Holdings is 1.55 times less risky than Curaleaf Holdings. The otc stock trades about -0.47 of its potential returns per unit of risk. The Curaleaf Holdings is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 334.00 in Curaleaf Holdings on August 25, 2024 and sell it today you would lose (124.00) from holding Curaleaf Holdings or give up 37.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascend Wellness Holdings vs. Curaleaf Holdings
Performance |
| Timeline |
| Ascend Wellness Holdings |
| Curaleaf Holdings |
Ascend Wellness and Curaleaf Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascend Wellness and Curaleaf Holdings
The main advantage of trading using opposite Ascend Wellness and Curaleaf Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascend Wellness position performs unexpectedly, Curaleaf Holdings 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 Curaleaf Holdings will offset losses from the drop in Curaleaf Holdings' long position.| Ascend Wellness vs. Verano Holdings Corp | Ascend Wellness vs. Green Thumb Industries | Ascend Wellness vs. AYR Strategies Class | Ascend Wellness vs. Trulieve Cannabis Corp |
| Curaleaf Holdings vs. Green Cures Botanical | Curaleaf Holdings vs. Galexxy Holdings | Curaleaf Holdings vs. Indoor Harvest Corp | Curaleaf Holdings vs. Speakeasy Cannabis Club |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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