Correlation Between Curaleaf Holdings and Evoke Pharma

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

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

Diversification Opportunities for Curaleaf Holdings and Evoke Pharma

0.79

Correlation Coefficient

Curaleaf Holdings  Evoke Pharma

Poor diversification

The 3 months correlation between Curaleaf and Evoke is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Curaleaf Holdings and Evoke Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evoke Pharma and Curaleaf Holdings 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 Curaleaf Holdings are associated (or correlated) with Evoke Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evoke Pharma has no effect on the direction of Curaleaf Holdings i.e., Curaleaf Holdings and Evoke Pharma go up and down completely randomly.

Pair Corralation between Curaleaf Holdings and Evoke Pharma

Assuming the 90 days horizon Curaleaf Holdings is expected to under-perform the Evoke Pharma. In addition to that, Curaleaf Holdings is 1.01 times more volatile than Evoke Pharma. It trades about -0.17 of its total potential returns per unit of risk. Evoke Pharma is currently generating about -0.15 per unit of volatility. If you would invest  489.00  in Evoke Pharma on December 26, 2024 and sell it today you would lose (201.00) from holding Evoke Pharma or give up 41.1% of portfolio value over 90 days.

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

Curaleaf Holdings  vs.  Evoke Pharma

Curaleaf Holdings

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Evoke Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evoke Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Curaleaf Holdings and Evoke Pharma

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

The idea behind Curaleaf Holdings and Evoke Pharma 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.