Correlation Between Wallbridge Mining and Auxly Cannabis
Can any of the company-specific risk be diversified away by investing in both Wallbridge Mining 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 Wallbridge Mining and Auxly Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wallbridge Mining and Auxly Cannabis Group, you can compare the effects of market volatilities on Wallbridge Mining 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 Wallbridge Mining with a short position of Auxly Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wallbridge Mining and Auxly Cannabis.
Diversification Opportunities for Wallbridge Mining and Auxly Cannabis
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wallbridge and Auxly is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Wallbridge Mining 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 Wallbridge Mining 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 Wallbridge Mining 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 Wallbridge Mining i.e., Wallbridge Mining and Auxly Cannabis go up and down completely randomly.
Pair Corralation between Wallbridge Mining and Auxly Cannabis
Assuming the 90 days horizon Wallbridge Mining is expected to generate 3.33 times less return on investment than Auxly Cannabis. But when comparing it to its historical volatility, Wallbridge Mining is 1.15 times less risky than Auxly Cannabis. It trades about 0.02 of its potential returns per unit of risk. Auxly Cannabis Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Auxly Cannabis Group on November 2, 2024 and sell it today you would earn a total of 1.00 from holding Auxly Cannabis Group or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wallbridge Mining vs. Auxly Cannabis Group
Performance |
| Timeline |
| Wallbridge Mining |
| Auxly Cannabis Group |
Wallbridge Mining and Auxly Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wallbridge Mining and Auxly Cannabis
The main advantage of trading using opposite Wallbridge Mining and Auxly Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wallbridge Mining 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.| Wallbridge Mining vs. Jaguar Mining | Wallbridge Mining vs. Amex Exploration | Wallbridge Mining vs. Lion One Metals |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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