Correlation Between Kali and Aurora Cannabis

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

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

Diversification Opportunities for Kali and Aurora Cannabis

0.0

Correlation Coefficient

Kali  Aurora Cannabis

Pay attention - limited upside

The 3 months correlation between Kali and Aurora is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kali Inc and Aurora Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Cannabis and Kali 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 Kali Inc 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 Kali i.e., Kali and Aurora Cannabis go up and down completely randomly.

Pair Corralation between Kali and Aurora Cannabis

If you would invest  418.00  in Aurora Cannabis on September 20, 2024 and sell it today you would lose (3.00) from holding Aurora Cannabis or give up 0.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Kali Inc  vs.  Aurora Cannabis

Kali Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kali Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Kali is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aurora Cannabis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Cannabis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kali and Aurora Cannabis

The main advantage of trading using opposite Kali and Aurora Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kali 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 Kali Inc 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.