Correlation Between 4Cable Tv and Aurora Cannabis
Can any of the company-specific risk be diversified away by investing in both 4Cable Tv 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 4Cable Tv and Aurora Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 4Cable Tv Internatio and Aurora Cannabis, you can compare the effects of market volatilities on 4Cable Tv 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 4Cable Tv with a short position of Aurora Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4Cable Tv and Aurora Cannabis.
Diversification Opportunities for 4Cable Tv and Aurora Cannabis
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 4Cable and Aurora is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding 4Cable Tv Internatio and Aurora Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Cannabis and 4Cable Tv 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 4Cable Tv Internatio 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 4Cable Tv i.e., 4Cable Tv and Aurora Cannabis go up and down completely randomly.
Pair Corralation between 4Cable Tv and Aurora Cannabis
Given the investment horizon of 90 days 4Cable Tv Internatio is expected to under-perform the Aurora Cannabis. In addition to that, 4Cable Tv is 2.88 times more volatile than Aurora Cannabis. It trades about -0.02 of its total potential returns per unit of risk. Aurora Cannabis is currently generating about -0.04 per unit of volatility. If you would invest 619.00 in Aurora Cannabis on August 29, 2024 and sell it today you would lose (165.00) from holding Aurora Cannabis or give up 26.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
4Cable Tv Internatio vs. Aurora Cannabis
Performance |
| Timeline |
| 4Cable Tv Internatio |
| Aurora Cannabis |
4Cable Tv and Aurora Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4Cable Tv and Aurora Cannabis
The main advantage of trading using opposite 4Cable Tv and Aurora Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4Cable Tv 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.| 4Cable Tv vs. PayPal Holdings | 4Cable Tv vs. Nasdaq Inc | 4Cable Tv vs. Choice Hotels International | 4Cable Tv vs. Microsoft |
| Aurora Cannabis vs. Canopy Growth Corp | Aurora Cannabis vs. SNDL Inc | Aurora Cannabis vs. Cronos Group | Aurora Cannabis vs. Curaleaf 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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