Correlation Between Aurora Cannabis and Lifecore Biomedical
Can any of the company-specific risk be diversified away by investing in both Aurora Cannabis and Lifecore Biomedical 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 Aurora Cannabis and Lifecore Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Cannabis and Lifecore Biomedical, you can compare the effects of market volatilities on Aurora Cannabis and Lifecore Biomedical 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 Aurora Cannabis with a short position of Lifecore Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Cannabis and Lifecore Biomedical.
Diversification Opportunities for Aurora Cannabis and Lifecore Biomedical
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aurora and Lifecore is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Cannabis and Lifecore Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifecore Biomedical and Aurora 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 Aurora Cannabis are associated (or correlated) with Lifecore Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifecore Biomedical has no effect on the direction of Aurora Cannabis i.e., Aurora Cannabis and Lifecore Biomedical go up and down completely randomly.
Pair Corralation between Aurora Cannabis and Lifecore Biomedical
Considering the 90-day investment horizon Aurora Cannabis is expected to generate 2.11 times more return on investment than Lifecore Biomedical. However, Aurora Cannabis is 2.11 times more volatile than Lifecore Biomedical. It trades about 0.13 of its potential returns per unit of risk. Lifecore Biomedical is currently generating about -0.02 per unit of risk. If you would invest 380.00 in Aurora Cannabis on February 5, 2024 and sell it today you would earn a total of 294.00 from holding Aurora Cannabis or generate 77.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aurora Cannabis vs. Lifecore Biomedical
Performance |
Timeline |
Aurora Cannabis |
Lifecore Biomedical |
Aurora Cannabis and Lifecore Biomedical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aurora Cannabis and Lifecore Biomedical
The main advantage of trading using opposite Aurora Cannabis and Lifecore Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Cannabis position performs unexpectedly, Lifecore Biomedical 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 Lifecore Biomedical will offset losses from the drop in Lifecore Biomedical's long position.Aurora Cannabis vs. Canopy Growth Corp | Aurora Cannabis vs. SNDL Inc | Aurora Cannabis vs. Cronos Group | Aurora Cannabis vs. Curaleaf Holdings |
Lifecore Biomedical vs. Lucy Scientific Discovery | Lifecore Biomedical vs. Alimera Sciences | Lifecore Biomedical vs. Shuttle Pharmaceuticals | Lifecore Biomedical vs. Catalent |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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