Correlation Between ASPEN PHARUNADR and AYR WELLNESS

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

By analyzing existing cross correlation between ASPEN PHARUNADR 1 and AYR WELLNESS INCRESVTG, you can compare the effects of market volatilities on ASPEN PHARUNADR and AYR WELLNESS 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 ASPEN PHARUNADR with a short position of AYR WELLNESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN PHARUNADR and AYR WELLNESS.

Diversification Opportunities for ASPEN PHARUNADR and AYR WELLNESS

-0.35

Correlation Coefficient

ASPEN PHARUNADR  AYR WELLNESS

Very good diversification

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

Pair Corralation between ASPEN PHARUNADR and AYR WELLNESS

Assuming the 90 days trading horizon ASPEN PHARUNADR 1 is expected to generate 0.28 times more return on investment than AYR WELLNESS. However, ASPEN PHARUNADR 1 is 3.52 times less risky than AYR WELLNESS. It trades about 0.04 of its potential returns per unit of risk. AYR WELLNESS INCRESVTG is currently generating about -0.15 per unit of risk. If you would invest  855.00  in ASPEN PHARUNADR 1 on December 20, 2024 and sell it today you would earn a total of  40.00  from holding ASPEN PHARUNADR 1 or generate 4.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

ASPEN PHARUNADR 1  vs.  AYR WELLNESS INCRESVTG

ASPEN PHARUNADR 1

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASPEN PHARUNADR 1 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ASPEN PHARUNADR may actually be approaching a critical reversion point that can send shares even higher in April 2025.

AYR WELLNESS INCRESVTG

Risk-Adjusted Performance

Very Weak

Over the last 90 days AYR WELLNESS INCRESVTG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward-looking 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.

Pair Trading with ASPEN PHARUNADR and AYR WELLNESS

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

The idea behind ASPEN PHARUNADR 1 and AYR WELLNESS INCRESVTG 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.