Correlation Between Sdzucker and Aurora Cannabis

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

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

Diversification Opportunities for Sdzucker and Aurora Cannabis

-0.41

Correlation Coefficient

Sdzucker  Aurora Cannabis

Very good diversification

The 3 months correlation between Sdzucker and Aurora is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sdzucker AG and Aurora Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Cannabis and Sdzucker 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 Sdzucker AG 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 Sdzucker i.e., Sdzucker and Aurora Cannabis go up and down completely randomly.

Pair Corralation between Sdzucker and Aurora Cannabis

Assuming the 90 days horizon Sdzucker is expected to generate 1.44 times less return on investment than Aurora Cannabis. But when comparing it to its historical volatility, Sdzucker AG is 1.29 times less risky than Aurora Cannabis. It trades about 0.22 of its potential returns per unit of risk. Aurora Cannabis is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  388.00  in Aurora Cannabis on February 7, 2025 and sell it today you would earn a total of  71.00  from holding Aurora Cannabis or generate 18.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sdzucker AG  vs.  Aurora Cannabis

Sdzucker AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sdzucker AG are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sdzucker reported solid returns over the last few months and may actually be approaching a breakup point.

Aurora Cannabis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aurora Cannabis 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 fundamental indicators remain somewhat strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sdzucker and Aurora Cannabis

The main advantage of trading using opposite Sdzucker and Aurora Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sdzucker 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.

The idea behind Sdzucker AG and Aurora Cannabis 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.