Correlation Between Aurora Cannabis and Shuttle Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Aurora Cannabis and Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Cannabis and Shuttle Pharmaceuticals, you can compare the effects of market volatilities on Aurora Cannabis and Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Cannabis and Shuttle Pharmaceuticals.
Diversification Opportunities for Aurora Cannabis and Shuttle Pharmaceuticals
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and Shuttle is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Cannabis and Shuttle Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuttle Pharmaceuticals has no effect on the direction of Aurora Cannabis i.e., Aurora Cannabis and Shuttle Pharmaceuticals go up and down completely randomly.
Pair Corralation between Aurora Cannabis and Shuttle Pharmaceuticals
Considering the 90-day investment horizon Aurora Cannabis is expected to generate 0.5 times more return on investment than Shuttle Pharmaceuticals. However, Aurora Cannabis is 2.0 times less risky than Shuttle Pharmaceuticals. It trades about -0.23 of its potential returns per unit of risk. Shuttle Pharmaceuticals is currently generating about -0.17 per unit of risk. If you would invest 595.00 in Aurora Cannabis on August 28, 2024 and sell it today you would lose (138.00) from holding Aurora Cannabis or give up 23.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Cannabis vs. Shuttle Pharmaceuticals
Performance |
| Timeline |
| Aurora Cannabis |
| Shuttle Pharmaceuticals |
Aurora Cannabis and Shuttle Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Cannabis and Shuttle Pharmaceuticals
The main advantage of trading using opposite Aurora Cannabis and Shuttle Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Cannabis position performs unexpectedly, Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals will offset losses from the drop in Shuttle Pharmaceuticals' long position.| Aurora Cannabis vs. Canopy Growth Corp | Aurora Cannabis vs. SNDL Inc | Aurora Cannabis vs. Cronos Group | Aurora Cannabis vs. Curaleaf Holdings |
| Shuttle Pharmaceuticals vs. Lifecore Biomedical | Shuttle Pharmaceuticals vs. Catalent | Shuttle Pharmaceuticals vs. Tilray Inc | Shuttle Pharmaceuticals vs. Organogenesis 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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