Correlation Between Constellation Brands and Auxly Cannabis
Can any of the company-specific risk be diversified away by investing in both Constellation Brands and Auxly 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 Constellation Brands and Auxly Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Brands Class and Auxly Cannabis Group, you can compare the effects of market volatilities on Constellation Brands and Auxly 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 Constellation Brands with a short position of Auxly Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and Auxly Cannabis.
Diversification Opportunities for Constellation Brands and Auxly Cannabis
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Constellation and Auxly is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and Auxly Cannabis Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auxly Cannabis Group and Constellation Brands 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 Constellation Brands Class are associated (or correlated) with Auxly Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auxly Cannabis Group has no effect on the direction of Constellation Brands i.e., Constellation Brands and Auxly Cannabis go up and down completely randomly.
Pair Corralation between Constellation Brands and Auxly Cannabis
Considering the 90-day investment horizon Constellation Brands Class is expected to generate 0.14 times more return on investment than Auxly Cannabis. However, Constellation Brands Class is 7.27 times less risky than Auxly Cannabis. It trades about -0.14 of its potential returns per unit of risk. Auxly Cannabis Group is currently generating about -0.1 per unit of risk. If you would invest 26,929 in Constellation Brands Class on January 26, 2024 and sell it today you would lose (774.00) from holding Constellation Brands Class or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Constellation Brands Class vs. Auxly Cannabis Group
Performance |
| Timeline |
| Constellation Brands |
| Auxly Cannabis Group |
Constellation Brands and Auxly Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Brands and Auxly Cannabis
The main advantage of trading using opposite Constellation Brands and Auxly Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Brands position performs unexpectedly, Auxly 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 Auxly Cannabis will offset losses from the drop in Auxly Cannabis' long position.| Constellation Brands vs. Andrew Peller Limited | Constellation Brands vs. Naked Wines plc | Constellation Brands vs. Willamette Valley Vineyards | Constellation Brands vs. The Tinley Beverage |
| Auxly Cannabis vs. Protokinetix | Auxly Cannabis vs. Silo Pharma | Auxly Cannabis vs. AngioSoma | Auxly Cannabis vs. Neutra Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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