Correlation Between AdvisorShares Pure and Curaleaf Holdings

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

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

Diversification Opportunities for AdvisorShares Pure and Curaleaf Holdings

0.96

Correlation Coefficient

AdvisorShares Pure  Curaleaf Holdings

Almost no diversification

The 3 months correlation between AdvisorShares and Curaleaf is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding AdvisorShares Pure Cannabis and Curaleaf Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curaleaf Holdings and AdvisorShares Pure 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 AdvisorShares Pure Cannabis are associated (or correlated) with Curaleaf Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curaleaf Holdings has no effect on the direction of AdvisorShares Pure i.e., AdvisorShares Pure and Curaleaf Holdings go up and down completely randomly.

Pair Corralation between AdvisorShares Pure and Curaleaf Holdings

Given the investment horizon of 90 days AdvisorShares Pure is expected to generate 2.72 times less return on investment than Curaleaf Holdings. But when comparing it to its historical volatility, AdvisorShares Pure Cannabis is 2.12 times less risky than Curaleaf Holdings. It trades about 0.23 of its potential returns per unit of risk. Curaleaf Holdings is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  85.00  in Curaleaf Holdings on May 17, 2025 and sell it today you would earn a total of  223.00  from holding Curaleaf Holdings or generate 262.35% return on investment over 90 days.

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

AdvisorShares Pure Cannabis  vs.  Curaleaf Holdings

AdvisorShares Pure

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AdvisorShares Pure Cannabis are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, AdvisorShares Pure displayed solid returns over the last few months and may actually be approaching a breakup point.

Curaleaf Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Curaleaf Holdings are ranked lower than 23 (%) 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.

Pair Trading with AdvisorShares Pure and Curaleaf Holdings

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

The idea behind AdvisorShares Pure Cannabis and Curaleaf 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 Transaction History module to view history of all your transactions and understand their impact on performance.