Correlation Between Acreage Holdings and Auxly Cannabis
Can any of the company-specific risk be diversified away by investing in both Acreage Holdings and Auxly Cannabis 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 Acreage Holdings and Auxly Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acreage Holdings and Auxly Cannabis Group, you can compare the effects of market volatilities on Acreage Holdings and Auxly Cannabis 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 Acreage Holdings with a short position of Auxly Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acreage Holdings and Auxly Cannabis.
Diversification Opportunities for Acreage Holdings and Auxly Cannabis
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Acreage and Auxly is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Acreage Holdings and Auxly Cannabis Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auxly Cannabis Group and Acreage Holdings 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 Acreage Holdings are associated (or correlated) with Auxly Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auxly Cannabis Group has no effect on the direction of Acreage Holdings i.e., Acreage Holdings and Auxly Cannabis go up and down completely randomly.
Pair Corralation between Acreage Holdings and Auxly Cannabis
Assuming the 90 days horizon Acreage Holdings is expected to generate 2.66 times more return on investment than Auxly Cannabis. However, Acreage Holdings is 2.66 times more volatile than Auxly Cannabis Group. It trades about 0.09 of its potential returns per unit of risk. Auxly Cannabis Group is currently generating about -0.14 per unit of risk. If you would invest 14.00 in Acreage Holdings on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Acreage Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acreage Holdings vs. Auxly Cannabis Group
Performance |
| Timeline |
| Acreage Holdings |
| Auxly Cannabis Group |
Acreage Holdings and Auxly Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acreage Holdings and Auxly Cannabis
The main advantage of trading using opposite Acreage Holdings and Auxly Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acreage Holdings position performs unexpectedly, Auxly Cannabis 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 Auxly Cannabis will offset losses from the drop in Auxly Cannabis' long position.| Acreage Holdings vs. AYR Strategies Class | Acreage Holdings vs. RIV Capital | Acreage Holdings vs. Verano Holdings Corp | Acreage Holdings vs. BZAM |
| Auxly Cannabis vs. C21 Investments | Auxly Cannabis vs. Delta 9 Cannabis | Auxly Cannabis vs. Halo Collective | Auxly Cannabis vs. Willow Biosciences |
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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