Correlation Between Entourage Health and Auxly Cannabis
Can any of the company-specific risk be diversified away by investing in both Entourage Health and Auxly 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 Entourage Health and Auxly Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entourage Health Corp and Auxly Cannabis Group, you can compare the effects of market volatilities on Entourage Health and Auxly 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 Entourage Health with a short position of Auxly Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entourage Health and Auxly Cannabis.
Diversification Opportunities for Entourage Health and Auxly Cannabis
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Entourage and Auxly is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Entourage Health Corp and Auxly Cannabis Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auxly Cannabis Group and Entourage Health 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 Entourage Health Corp are associated (or correlated) with Auxly Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auxly Cannabis Group has no effect on the direction of Entourage Health i.e., Entourage Health and Auxly Cannabis go up and down completely randomly.
Pair Corralation between Entourage Health and Auxly Cannabis
Assuming the 90 days trading horizon Entourage Health Corp is expected to generate 4.9 times more return on investment than Auxly Cannabis. However, Entourage Health is 4.9 times more volatile than Auxly Cannabis Group. It trades about 0.11 of its potential returns per unit of risk. Auxly Cannabis Group is currently generating about 0.33 per unit of risk. If you would invest 1.00 in Entourage Health Corp on October 24, 2024 and sell it today you would lose (0.50) from holding Entourage Health Corp or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entourage Health Corp vs. Auxly Cannabis Group
Performance |
| Timeline |
| Entourage Health Corp |
| Auxly Cannabis Group |
Entourage Health and Auxly Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entourage Health and Auxly Cannabis
The main advantage of trading using opposite Entourage Health and Auxly Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entourage Health position performs unexpectedly, Auxly 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 Auxly Cannabis will offset losses from the drop in Auxly Cannabis' long position.| Entourage Health vs. Auxly Cannabis Group | Entourage Health vs. Lifeist Wellness | Entourage Health vs. Medipharm Labs Corp |
| Auxly Cannabis vs. OrganiGram Holdings | Auxly Cannabis vs. Tilray Inc | Auxly Cannabis vs. Lifeist Wellness | Auxly Cannabis vs. Medipharm Labs 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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