Correlation Between Aurora Cannabis and Sohm
Can any of the company-specific risk be diversified away by investing in both Aurora Cannabis and Sohm 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 Aurora Cannabis and Sohm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Cannabis and Sohm Inc, you can compare the effects of market volatilities on Aurora Cannabis and Sohm 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 Aurora Cannabis with a short position of Sohm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Cannabis and Sohm.
Diversification Opportunities for Aurora Cannabis and Sohm
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aurora and Sohm is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Cannabis and Sohm Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sohm Inc and Aurora Cannabis 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 Aurora Cannabis are associated (or correlated) with Sohm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sohm Inc has no effect on the direction of Aurora Cannabis i.e., Aurora Cannabis and Sohm go up and down completely randomly.
Pair Corralation between Aurora Cannabis and Sohm
If you would invest 0.08 in Sohm Inc on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Sohm Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Aurora Cannabis vs. Sohm Inc
Performance |
| Timeline |
| Aurora Cannabis |
| Sohm Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aurora Cannabis and Sohm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Cannabis and Sohm
The main advantage of trading using opposite Aurora Cannabis and Sohm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Cannabis position performs unexpectedly, Sohm 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 Sohm will offset losses from the drop in Sohm's long position.| Aurora Cannabis vs. Canopy Growth Corp | Aurora Cannabis vs. SNDL Inc | Aurora Cannabis vs. Cronos Group | Aurora Cannabis vs. Curaleaf Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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