Correlation Between AYR Strategies and Medicine Man
Can any of the company-specific risk be diversified away by investing in both AYR Strategies and Medicine Man 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 Medicine Man 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 Medicine Man Technologies, you can compare the effects of market volatilities on AYR Strategies and Medicine Man 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 Medicine Man. Check out your portfolio center. Please also check ongoing floating volatility patterns of AYR Strategies and Medicine Man.
Diversification Opportunities for AYR Strategies and Medicine Man
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AYR and Medicine is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding AYR Strategies Class and Medicine Man Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicine Man Technologies 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 Medicine Man. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicine Man Technologies has no effect on the direction of AYR Strategies i.e., AYR Strategies and Medicine Man go up and down completely randomly.
Pair Corralation between AYR Strategies and Medicine Man
Assuming the 90 days horizon AYR Strategies Class is expected to under-perform the Medicine Man. But the otc stock apears to be less risky and, when comparing its historical volatility, AYR Strategies Class is 2.26 times less risky than Medicine Man. The otc stock trades about -0.32 of its potential returns per unit of risk. The Medicine Man Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Medicine Man Technologies on August 28, 2024 and sell it today you would lose (9.00) from holding Medicine Man Technologies or give up 45.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AYR Strategies Class vs. Medicine Man Technologies
Performance |
| Timeline |
| AYR Strategies Class |
| Medicine Man Technologies |
AYR Strategies and Medicine Man Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AYR Strategies and Medicine Man
The main advantage of trading using opposite AYR Strategies and Medicine Man positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AYR Strategies position performs unexpectedly, Medicine Man 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 Medicine Man will offset losses from the drop in Medicine Man's 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 |
| Medicine Man vs. Lowell Farms | Medicine Man vs. AYR Strategies Class | Medicine Man vs. 4Front Ventures Corp | Medicine Man vs. Verano Holdings 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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