Correlation Between AYR Strategies and Ascend Wellness
Can any of the company-specific risk be diversified away by investing in both AYR Strategies and Ascend Wellness 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 AYR Strategies and Ascend Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AYR Strategies Class and Ascend Wellness Holdings, you can compare the effects of market volatilities on AYR Strategies and Ascend Wellness 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 AYR Strategies with a short position of Ascend Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of AYR Strategies and Ascend Wellness.
Diversification Opportunities for AYR Strategies and Ascend Wellness
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AYR and Ascend is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AYR Strategies Class and Ascend Wellness Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascend Wellness Holdings and AYR Strategies 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 AYR Strategies Class are associated (or correlated) with Ascend Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascend Wellness Holdings has no effect on the direction of AYR Strategies i.e., AYR Strategies and Ascend Wellness go up and down completely randomly.
Pair Corralation between AYR Strategies and Ascend Wellness
Assuming the 90 days horizon AYR Strategies Class is expected to under-perform the Ascend Wellness. In addition to that, AYR Strategies is 2.16 times more volatile than Ascend Wellness Holdings. It trades about -0.32 of its total potential returns per unit of risk. Ascend Wellness Holdings is currently generating about -0.52 per unit of volatility. If you would invest 84.00 in Ascend Wellness Holdings on August 28, 2024 and sell it today you would lose (47.00) from holding Ascend Wellness Holdings or give up 55.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AYR Strategies Class vs. Ascend Wellness Holdings
Performance |
| Timeline |
| AYR Strategies Class |
| Ascend Wellness Holdings |
AYR Strategies and Ascend Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AYR Strategies and Ascend Wellness
The main advantage of trading using opposite AYR Strategies and Ascend Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AYR Strategies position performs unexpectedly, Ascend Wellness 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 Ascend Wellness will offset losses from the drop in Ascend Wellness' long position.| AYR Strategies vs. Green Thumb Industries | AYR Strategies vs. Trulieve Cannabis Corp | AYR Strategies vs. Goodness Growth Holdings | AYR Strategies vs. Verano Holdings Corp |
| Ascend Wellness vs. Verano Holdings Corp | Ascend Wellness vs. Green Thumb Industries | Ascend Wellness vs. AYR Strategies Class | Ascend Wellness vs. Trulieve Cannabis Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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