Correlation Between Auxly Cannabis and NTG Clarity
Can any of the company-specific risk be diversified away by investing in both Auxly Cannabis and NTG Clarity 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 NTG Clarity 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 NTG Clarity Networks, you can compare the effects of market volatilities on Auxly Cannabis and NTG Clarity 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 NTG Clarity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auxly Cannabis and NTG Clarity.
Diversification Opportunities for Auxly Cannabis and NTG Clarity
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Auxly and NTG is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Auxly Cannabis Group and NTG Clarity Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Clarity Networks 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 NTG Clarity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Clarity Networks has no effect on the direction of Auxly Cannabis i.e., Auxly Cannabis and NTG Clarity go up and down completely randomly.
Pair Corralation between Auxly Cannabis and NTG Clarity
Assuming the 90 days trading horizon Auxly Cannabis Group is expected to generate 1.73 times more return on investment than NTG Clarity. However, Auxly Cannabis is 1.73 times more volatile than NTG Clarity Networks. It trades about 0.08 of its potential returns per unit of risk. NTG Clarity Networks is currently generating about 0.1 per unit of risk. If you would invest 3.00 in Auxly Cannabis Group on October 28, 2024 and sell it today you would earn a total of 2.00 from holding Auxly Cannabis Group or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auxly Cannabis Group vs. NTG Clarity Networks
Performance |
| Timeline |
| Auxly Cannabis Group |
| NTG Clarity Networks |
Auxly Cannabis and NTG Clarity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auxly Cannabis and NTG Clarity
The main advantage of trading using opposite Auxly Cannabis and NTG Clarity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auxly Cannabis position performs unexpectedly, NTG Clarity 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 NTG Clarity will offset losses from the drop in NTG Clarity's long position.| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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