Correlation Between AYR Strategies and Curaleaf Holdings

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

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

Diversification Opportunities for AYR Strategies and Curaleaf Holdings

0.97

Correlation Coefficient

AYR Strategies  Curaleaf Holdings

Almost no diversification

The 3 months correlation between AYR and Curaleaf is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding AYR Strategies Class and Curaleaf Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curaleaf Holdings and AYR Strategies 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 AYR Strategies Class are associated (or correlated) with Curaleaf Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curaleaf Holdings has no effect on the direction of AYR Strategies i.e., AYR Strategies and Curaleaf Holdings go up and down completely randomly.

Pair Corralation between AYR Strategies and Curaleaf Holdings

Assuming the 90 days horizon AYR Strategies Class is expected to under-perform the Curaleaf Holdings. In addition to that, AYR Strategies is 1.56 times more volatile than Curaleaf Holdings. It trades about -0.17 of its total potential returns per unit of risk. Curaleaf Holdings is currently generating about -0.16 per unit of volatility. If you would invest  341.00  in Curaleaf Holdings on October 23, 2024 and sell it today you would lose (190.00) from holding Curaleaf Holdings or give up 55.72% of portfolio value over 90 days.

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

AYR Strategies Class  vs.  Curaleaf Holdings

AYR Strategies Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AYR Strategies Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Curaleaf Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Curaleaf Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AYR Strategies and Curaleaf Holdings

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

The idea behind AYR Strategies Class and Curaleaf 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.