Correlation Between Curaleaf Holdings and Sky Century

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

By analyzing existing cross correlation between Curaleaf Holdings and Sky Century Investment, you can compare the effects of market volatilities on Curaleaf Holdings and Sky Century 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 Curaleaf Holdings with a short position of Sky Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curaleaf Holdings and Sky Century.

Diversification Opportunities for Curaleaf Holdings and Sky Century

0.24

Correlation Coefficient

Curaleaf Holdings  Sky Century

Modest diversification

The 3 months correlation between Curaleaf and Sky is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Curaleaf Holdings and Sky Century Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky Century Investment and Curaleaf Holdings 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 Curaleaf Holdings are associated (or correlated) with Sky Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky Century Investment has no effect on the direction of Curaleaf Holdings i.e., Curaleaf Holdings and Sky Century go up and down completely randomly.

Pair Corralation between Curaleaf Holdings and Sky Century

Assuming the 90 days horizon Curaleaf Holdings is expected to under-perform the Sky Century. But the otc stock apears to be less risky and, when comparing its historical volatility, Curaleaf Holdings is 6.46 times less risky than Sky Century. The otc stock trades about -0.08 of its potential returns per unit of risk. The Sky Century Investment is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  0.35  in Sky Century Investment on September 12, 2024 and sell it today you would lose (0.10) from holding Sky Century Investment or give up 28.57% of portfolio value over 90 days.

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

Curaleaf Holdings  vs.  Sky Century Investment

Curaleaf Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Curaleaf Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sky Century Investment

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sky Century Investment are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Sky Century demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Curaleaf Holdings and Sky Century

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

The idea behind Curaleaf Holdings and Sky Century Investment 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..