Correlation Between MPX International and Aurora Cannabis
Can any of the company-specific risk be diversified away by investing in both MPX International and Aurora Cannabis 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 MPX International and Aurora Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPX International Corp and Aurora Cannabis, you can compare the effects of market volatilities on MPX International and Aurora Cannabis 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 MPX International with a short position of Aurora Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPX International and Aurora Cannabis.
Diversification Opportunities for MPX International and Aurora Cannabis
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MPX and Aurora is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding MPX International Corp and Aurora Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Cannabis and MPX International 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 MPX International Corp are associated (or correlated) with Aurora Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Cannabis has no effect on the direction of MPX International i.e., MPX International and Aurora Cannabis go up and down completely randomly.
Pair Corralation between MPX International and Aurora Cannabis
Assuming the 90 days horizon MPX International Corp is expected to generate 52.15 times more return on investment than Aurora Cannabis. However, MPX International is 52.15 times more volatile than Aurora Cannabis. It trades about 0.33 of its potential returns per unit of risk. Aurora Cannabis is currently generating about -0.06 per unit of risk. If you would invest 0.02 in MPX International Corp on October 8, 2024 and sell it today you would earn a total of 0.08 from holding MPX International Corp or generate 400.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MPX International Corp vs. Aurora Cannabis
Performance |
Timeline |
MPX International Corp |
Aurora Cannabis |
MPX International and Aurora Cannabis Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MPX International and Aurora Cannabis
The main advantage of trading using opposite MPX International and Aurora Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPX International position performs unexpectedly, Aurora Cannabis 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 Aurora Cannabis will offset losses from the drop in Aurora Cannabis' long position.MPX International vs. North Bud Farms | MPX International vs. CanaQuest Medical Corp | MPX International vs. City View Green | MPX International vs. Benchmark Botanics |
Aurora Cannabis vs. Canopy Growth Corp | Aurora Cannabis vs. SNDL Inc | Aurora Cannabis vs. Cronos Group | Aurora Cannabis vs. Curaleaf Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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