Correlation Between Amazon CDR and Aurora Cannabis
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Aurora 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 Amazon CDR and Aurora Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Aurora Cannabis, you can compare the effects of market volatilities on Amazon CDR and Aurora 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 Amazon CDR with a short position of Aurora Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Aurora Cannabis.
Diversification Opportunities for Amazon CDR and Aurora Cannabis
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Aurora is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Aurora Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Cannabis and Amazon CDR 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 Amazon CDR are associated (or correlated) with Aurora Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Cannabis has no effect on the direction of Amazon CDR i.e., Amazon CDR and Aurora Cannabis go up and down completely randomly.
Pair Corralation between Amazon CDR and Aurora Cannabis
Assuming the 90 days trading horizon Amazon CDR is expected to generate 0.55 times more return on investment than Aurora Cannabis. However, Amazon CDR is 1.8 times less risky than Aurora Cannabis. It trades about 0.08 of its potential returns per unit of risk. Aurora Cannabis is currently generating about -0.17 per unit of risk. If you would invest 2,678 in Amazon CDR on October 24, 2024 and sell it today you would earn a total of 61.00 from holding Amazon CDR or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Aurora Cannabis
Performance |
| Timeline |
| Amazon CDR |
| Aurora Cannabis |
Amazon CDR and Aurora Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Aurora Cannabis
The main advantage of trading using opposite Amazon CDR and Aurora Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Aurora 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 Aurora Cannabis will offset losses from the drop in Aurora Cannabis' long position.| Amazon CDR vs. Queens Road Capital | Amazon CDR vs. Osisko Metals | Amazon CDR vs. NeXGold Mining Corp | Amazon CDR vs. AKITA Drilling |
| Aurora Cannabis vs. Canopy Growth Corp | Aurora Cannabis vs. Cronos Group | Aurora Cannabis vs. Air Canada | Aurora Cannabis vs. BlackBerry |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |