Correlation Between Auxly Cannabis and Green Growth

Can any of the company-specific risk be diversified away by investing in both Auxly Cannabis and Green Growth 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 Green Growth 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 Green Growth Brands, you can compare the effects of market volatilities on Auxly Cannabis and Green Growth 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 Green Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auxly Cannabis and Green Growth.

Diversification Opportunities for Auxly Cannabis and Green Growth

0.0

Correlation Coefficient

Auxly Cannabis  Green Growth

Pay attention - limited upside

The 3 months correlation between Auxly and Green is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Auxly Cannabis Group and Green Growth Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Growth Brands 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 Green Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Growth Brands has no effect on the direction of Auxly Cannabis i.e., Auxly Cannabis and Green Growth go up and down completely randomly.

Pair Corralation between Auxly Cannabis and Green Growth

Assuming the 90 days horizon Auxly Cannabis is expected to generate 4.55 times less return on investment than Green Growth. But when comparing it to its historical volatility, Auxly Cannabis Group is 6.54 times less risky than Green Growth. It trades about 0.07 of its potential returns per unit of risk. Green Growth Brands is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Green Growth Brands on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Green Growth Brands or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.65%
Values	Daily Returns

Auxly Cannabis Group  vs.  Green Growth Brands

Auxly Cannabis Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Auxly Cannabis Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Auxly Cannabis reported solid returns over the last few months and may actually be approaching a breakup point.

Green Growth Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Green Growth Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Green Growth is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Auxly Cannabis and Green Growth

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

The idea behind Auxly Cannabis Group and Green Growth Brands 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..