Correlation Between Cannara Biotech and Auxly Cannabis
Can any of the company-specific risk be diversified away by investing in both Cannara Biotech 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 Cannara Biotech and Auxly Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannara Biotech and Auxly Cannabis Group, you can compare the effects of market volatilities on Cannara Biotech 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 Cannara Biotech with a short position of Auxly Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannara Biotech and Auxly Cannabis.
Diversification Opportunities for Cannara Biotech and Auxly Cannabis
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cannara and Auxly is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cannara Biotech 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 Cannara Biotech 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 Cannara Biotech 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 Cannara Biotech i.e., Cannara Biotech and Auxly Cannabis go up and down completely randomly.
Pair Corralation between Cannara Biotech and Auxly Cannabis
Assuming the 90 days horizon Cannara Biotech is expected to under-perform the Auxly Cannabis. But the otc stock apears to be less risky and, when comparing its historical volatility, Cannara Biotech is 1.59 times less risky than Auxly Cannabis. The otc stock trades about -0.19 of its potential returns per unit of risk. The Auxly Cannabis Group is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 3.27 in Auxly Cannabis Group on August 27, 2024 and sell it today you would lose (0.57) from holding Auxly Cannabis Group or give up 17.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cannara Biotech vs. Auxly Cannabis Group
Performance |
| Timeline |
| Cannara Biotech |
| Auxly Cannabis Group |
Cannara Biotech and Auxly Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannara Biotech and Auxly Cannabis
The main advantage of trading using opposite Cannara Biotech and Auxly Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannara Biotech 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.| Cannara Biotech vs. Benchmark Botanics | Cannara Biotech vs. Speakeasy Cannabis Club | Cannara Biotech vs. City View Green | Cannara Biotech vs. BC Craft Supply |
| Auxly Cannabis vs. Rezolute | Auxly Cannabis vs. Tempest Therapeutics | Auxly Cannabis vs. Forte Biosciences | Auxly Cannabis vs. Dyadic International |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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