Correlation Between Aurora Cannabis and Acer Therapeutics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Aurora Cannabis and Acer Therapeutics 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 Acer Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Cannabis and Acer Therapeutics, you can compare the effects of market volatilities on Aurora Cannabis and Acer Therapeutics 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 Acer Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Cannabis and Acer Therapeutics.

Diversification Opportunities for Aurora Cannabis and Acer Therapeutics

-0.18
  Correlation Coefficient

Good diversification

The 3 months correlation between Aurora and Acer is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Cannabis and Acer Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acer Therapeutics 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 Acer Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acer Therapeutics has no effect on the direction of Aurora Cannabis i.e., Aurora Cannabis and Acer Therapeutics go up and down completely randomly.

Pair Corralation between Aurora Cannabis and Acer Therapeutics

If you would invest  331.00  in Aurora Cannabis on December 29, 2023 and sell it today you would earn a total of  108.00  from holding Aurora Cannabis or generate 32.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.35%
ValuesDaily Returns

Aurora Cannabis  vs.  Acer Therapeutics

 Performance 
       Timeline  
Aurora Cannabis 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Weak
Over the last 90 days Aurora Cannabis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Aurora Cannabis is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Acer Therapeutics 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Acer Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Acer Therapeutics is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Aurora Cannabis and Acer Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aurora Cannabis and Acer Therapeutics

The main advantage of trading using opposite Aurora Cannabis and Acer Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Cannabis position performs unexpectedly, Acer Therapeutics 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 Acer Therapeutics will offset losses from the drop in Acer Therapeutics' long position.
The idea behind Aurora Cannabis and Acer Therapeutics 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.
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 Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope