Correlation Between Curaleaf Holdings and Aurora Cannabis

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

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

Diversification Opportunities for Curaleaf Holdings and Aurora Cannabis

-0.32

Correlation Coefficient

Curaleaf Holdings  Aurora Cannabis

Very good diversification

The 3 months correlation between Curaleaf and Aurora is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Curaleaf Holdings and Aurora Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Cannabis 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 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 Curaleaf Holdings i.e., Curaleaf Holdings and Aurora Cannabis go up and down completely randomly.

Pair Corralation between Curaleaf Holdings and Aurora Cannabis

Assuming the 90 days horizon Curaleaf Holdings is expected to generate 1.51 times more return on investment than Aurora Cannabis. However, Curaleaf Holdings is 1.51 times more volatile than Aurora Cannabis. It trades about 0.2 of its potential returns per unit of risk. Aurora Cannabis is currently generating about -0.04 per unit of risk. If you would invest  82.00  in Curaleaf Holdings on May 10, 2025 and sell it today you would earn a total of  86.00  from holding Curaleaf Holdings or generate 104.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Curaleaf Holdings  vs.  Aurora Cannabis

Curaleaf Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Curaleaf Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Curaleaf Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Aurora Cannabis

Risk-Adjusted Performance

Weakest

Over the last 90 days Aurora Cannabis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Curaleaf Holdings and Aurora Cannabis

The main advantage of trading using opposite Curaleaf Holdings and Aurora Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curaleaf Holdings 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 Curaleaf Holdings 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.