Correlation Between Visa and Auxly Cannabis
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Auxly Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Auxly Cannabis Group, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Auxly Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Auxly Cannabis.
Diversification Opportunities for Visa and Auxly Cannabis
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and Auxly is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and Auxly Cannabis go up and down completely randomly.
Pair Corralation between Visa and Auxly Cannabis
Taking into account the 90-day investment horizon Visa is expected to generate 14.84 times less return on investment than Auxly Cannabis. But when comparing it to its historical volatility, Visa Class A is 15.77 times less risky than Auxly Cannabis. It trades about 0.09 of its potential returns per unit of risk. Auxly Cannabis Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Auxly Cannabis Group on August 30, 2024 and sell it today you would earn a total of 1.75 from holding Auxly Cannabis Group or generate 87.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Visa Class A vs. Auxly Cannabis Group
Performance |
| Timeline |
| Visa Class A |
| Auxly Cannabis Group |
Visa and Auxly Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Auxly Cannabis
The main advantage of trading using opposite Visa and Auxly Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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