Correlation Between Speakeasy Cannabis and Aspen Pharmacare

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

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

Diversification Opportunities for Speakeasy Cannabis and Aspen Pharmacare

0.0

Correlation Coefficient

Speakeasy Cannabis  Aspen Pharmacare

Pay attention - limited upside

The 3 months correlation between Speakeasy and Aspen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Speakeasy Cannabis Club and Aspen Pharmacare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Pharmacare Holdings and Speakeasy 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 Speakeasy Cannabis Club are associated (or correlated) with Aspen Pharmacare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Pharmacare Holdings has no effect on the direction of Speakeasy Cannabis i.e., Speakeasy Cannabis and Aspen Pharmacare go up and down completely randomly.

Pair Corralation between Speakeasy Cannabis and Aspen Pharmacare

Assuming the 90 days horizon Speakeasy Cannabis Club is expected to under-perform the Aspen Pharmacare. But the pink sheet apears to be less risky and, when comparing its historical volatility, Speakeasy Cannabis Club is 2.75 times less risky than Aspen Pharmacare. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Aspen Pharmacare Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  731.00  in Aspen Pharmacare Holdings on September 20, 2024 and sell it today you would earn a total of  494.00  from holding Aspen Pharmacare Holdings or generate 67.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	78.99%
Values	Daily Returns

Speakeasy Cannabis Club  vs.  Aspen Pharmacare Holdings

Speakeasy Cannabis Club

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Speakeasy Cannabis Club has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Speakeasy Cannabis is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Aspen Pharmacare Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aspen Pharmacare Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Aspen Pharmacare is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Speakeasy Cannabis and Aspen Pharmacare

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

The idea behind Speakeasy Cannabis Club and Aspen Pharmacare Holdings 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.