Correlation Between Auxly Cannabis and Lifeist Wellness
Can any of the company-specific risk be diversified away by investing in both Auxly Cannabis and Lifeist Wellness 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 Auxly Cannabis and Lifeist Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auxly Cannabis Group and Lifeist Wellness, you can compare the effects of market volatilities on Auxly Cannabis and Lifeist Wellness 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 Auxly Cannabis with a short position of Lifeist Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auxly Cannabis and Lifeist Wellness.
Diversification Opportunities for Auxly Cannabis and Lifeist Wellness
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Auxly and Lifeist is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Auxly Cannabis Group and Lifeist Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeist Wellness and Auxly Cannabis 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 Auxly Cannabis Group are associated (or correlated) with Lifeist Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeist Wellness has no effect on the direction of Auxly Cannabis i.e., Auxly Cannabis and Lifeist Wellness go up and down completely randomly.
Pair Corralation between Auxly Cannabis and Lifeist Wellness
Assuming the 90 days trading horizon Auxly Cannabis Group is expected to generate 1.4 times more return on investment than Lifeist Wellness. However, Auxly Cannabis is 1.4 times more volatile than Lifeist Wellness. It trades about 0.1 of its potential returns per unit of risk. Lifeist Wellness is currently generating about 0.03 per unit of risk. If you would invest 4.00 in Auxly Cannabis Group on November 1, 2024 and sell it today you would earn a total of 0.50 from holding Auxly Cannabis Group or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auxly Cannabis Group vs. Lifeist Wellness
Performance |
| Timeline |
| Auxly Cannabis Group |
| Lifeist Wellness |
Auxly Cannabis and Lifeist Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auxly Cannabis and Lifeist Wellness
The main advantage of trading using opposite Auxly Cannabis and Lifeist Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auxly Cannabis position performs unexpectedly, Lifeist Wellness 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 Lifeist Wellness will offset losses from the drop in Lifeist Wellness' long position.| Auxly Cannabis vs. OrganiGram Holdings | Auxly Cannabis vs. Tilray Inc | Auxly Cannabis vs. Lifeist Wellness | Auxly Cannabis vs. Medipharm Labs Corp |
| Lifeist Wellness vs. Auxly Cannabis Group | Lifeist Wellness vs. Entourage Health Corp | Lifeist Wellness vs. Tilray Inc | Lifeist Wellness 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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