Correlation Between Auxly Cannabis and Endexx Corp

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

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

Diversification Opportunities for Auxly Cannabis and Endexx Corp

0.21

Correlation Coefficient

Auxly Cannabis  Endexx Corp

Modest diversification

The 3 months correlation between Auxly and Endexx is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Auxly Cannabis Group and Endexx Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endexx Corp and Auxly 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 Auxly Cannabis Group are associated (or correlated) with Endexx Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endexx Corp has no effect on the direction of Auxly Cannabis i.e., Auxly Cannabis and Endexx Corp go up and down completely randomly.

Pair Corralation between Auxly Cannabis and Endexx Corp

Assuming the 90 days horizon Auxly Cannabis Group is expected to under-perform the Endexx Corp. But the otc stock apears to be less risky and, when comparing its historical volatility, Auxly Cannabis Group is 1.4 times less risky than Endexx Corp. The otc stock trades about -0.02 of its potential returns per unit of risk. The Endexx Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1.37  in Endexx Corp on September 3, 2024 and sell it today you would lose (0.37) from holding Endexx Corp or give up 27.01% of portfolio value over 90 days.

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

Auxly Cannabis Group  vs.  Endexx Corp

Auxly Cannabis Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Auxly Cannabis Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Endexx Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endexx Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Auxly Cannabis and Endexx Corp

The main advantage of trading using opposite Auxly Cannabis and Endexx Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auxly Cannabis position performs unexpectedly, Endexx Corp 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 Endexx Corp will offset losses from the drop in Endexx Corp's long position.

The idea behind Auxly Cannabis Group and Endexx Corp 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.