Correlation Between Ascend Wellness and Jushi Holdings

Can any of the company-specific risk be diversified away by investing in both Ascend Wellness and Jushi Holdings 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 Ascend Wellness and Jushi Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ascend Wellness Holdings and Jushi Holdings, you can compare the effects of market volatilities on Ascend Wellness and Jushi Holdings 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 Ascend Wellness with a short position of Jushi Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascend Wellness and Jushi Holdings.

Diversification Opportunities for Ascend Wellness and Jushi Holdings

0.35

Correlation Coefficient

Ascend Wellness  Jushi Holdings

Weak diversification

The 3 months correlation between Ascend and Jushi is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ascend Wellness Holdings and Jushi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jushi Holdings and Ascend Wellness 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 Ascend Wellness Holdings are associated (or correlated) with Jushi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jushi Holdings has no effect on the direction of Ascend Wellness i.e., Ascend Wellness and Jushi Holdings go up and down completely randomly.

Pair Corralation between Ascend Wellness and Jushi Holdings

Given the investment horizon of 90 days Ascend Wellness is expected to generate 3.18 times less return on investment than Jushi Holdings. But when comparing it to its historical volatility, Ascend Wellness Holdings is 1.1 times less risky than Jushi Holdings. It trades about 0.01 of its potential returns per unit of risk. Jushi Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Jushi Holdings on December 28, 2024 and sell it today you would lose (1.00) from holding Jushi Holdings or give up 3.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ascend Wellness Holdings  vs.  Jushi Holdings

Ascend Wellness Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ascend Wellness Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Ascend Wellness is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Jushi Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jushi Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, Jushi Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ascend Wellness and Jushi Holdings

The main advantage of trading using opposite Ascend Wellness and Jushi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascend Wellness position performs unexpectedly, Jushi Holdings 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 Jushi Holdings will offset losses from the drop in Jushi Holdings' long position.

The idea behind Ascend Wellness Holdings and Jushi Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.