Correlation Between Curaleaf Holdings and Aurora Cannabis
Can any of the company-specific risk be diversified away by investing in both Curaleaf Holdings 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 Curaleaf Holdings and Aurora Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curaleaf Holdings and Aurora Cannabis, you can compare the effects of market volatilities on Curaleaf Holdings 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 Curaleaf Holdings with a short position of Aurora Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curaleaf Holdings and Aurora Cannabis.
Diversification Opportunities for Curaleaf Holdings and Aurora Cannabis
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Curaleaf and Aurora is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Curaleaf Holdings and Aurora Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Cannabis and Curaleaf Holdings 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 Curaleaf 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 Curaleaf Holdings i.e., Curaleaf Holdings and Aurora Cannabis go up and down completely randomly.
Pair Corralation between Curaleaf Holdings and Aurora Cannabis
Assuming the 90 days horizon Curaleaf Holdings is expected to generate 1.7 times more return on investment than Aurora Cannabis. However, Curaleaf Holdings is 1.7 times more volatile than Aurora Cannabis. It trades about -0.19 of its potential returns per unit of risk. Aurora Cannabis is currently generating about -0.37 per unit of risk. If you would invest 163.00 in Curaleaf Holdings on November 7, 2024 and sell it today you would lose (31.00) from holding Curaleaf Holdings or give up 19.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Curaleaf Holdings vs. Aurora Cannabis
Performance |
| Timeline |
| Curaleaf Holdings |
| Aurora Cannabis |
Curaleaf Holdings and Aurora Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curaleaf Holdings and Aurora Cannabis
The main advantage of trading using opposite Curaleaf Holdings and Aurora Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curaleaf Holdings 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.| Curaleaf Holdings vs. Green Thumb Industries | Curaleaf Holdings vs. Cresco Labs | Curaleaf Holdings vs. Trulieve Cannabis Corp | Curaleaf Holdings vs. Cronos Group |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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