Correlation Between Bio Path and Aurora Cannabis
Can any of the company-specific risk be diversified away by investing in both Bio Path 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 Bio Path and Aurora Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Path Holdings and Aurora Cannabis, you can compare the effects of market volatilities on Bio Path 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 Bio Path with a short position of Aurora Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Path and Aurora Cannabis.
Diversification Opportunities for Bio Path and Aurora Cannabis
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bio and Aurora is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bio Path Holdings and Aurora Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Cannabis and Bio Path 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 Bio Path Holdings 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 Bio Path i.e., Bio Path and Aurora Cannabis go up and down completely randomly.
Pair Corralation between Bio Path and Aurora Cannabis
Given the investment horizon of 90 days Bio Path Holdings is expected to under-perform the Aurora Cannabis. In addition to that, Bio Path is 1.28 times more volatile than Aurora Cannabis. It trades about -0.05 of its total potential returns per unit of risk. Aurora Cannabis is currently generating about 0.02 per unit of volatility. If you would invest 551.00 in Aurora Cannabis on August 26, 2024 and sell it today you would lose (117.00) from holding Aurora Cannabis or give up 21.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio Path Holdings vs. Aurora Cannabis
Performance |
| Timeline |
| Bio Path Holdings |
| Aurora Cannabis |
Bio Path and Aurora Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Path and Aurora Cannabis
The main advantage of trading using opposite Bio Path and Aurora Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Path 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.| Bio Path vs. Capricor Therapeutics | Bio Path vs. NextCure | Bio Path vs. Pulmatrix | Bio Path vs. Crinetics Pharmaceuticals |
| Aurora Cannabis vs. Capricor Therapeutics | Aurora Cannabis vs. Akari Therapeutics PLC | Aurora Cannabis vs. Soleno Therapeutics | Aurora Cannabis vs. Bio Path 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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