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Aphria Inc. (OTC: APHQF)
Note the ticker used is TSX: APH - the same company
Note OTC: HRVOF is used on the chart - same company.
Aphria is one of the larger players in the cannabis space right now; undertaking international shipments of cannabis oils to Australian medical life science company, Medlab Clinical Ltd. This bodes well with their claim: Aphria is a leading global cannabis company driven by an unrelenting commitment to its people, product quality, and innovation. Perhaps you may feel that a particular company is performing better or worse than it’s peers or the index of which it is within. One way to compare how a company is doing relative to its peers or an ETF as in this example Horizon’s HMMJ would be to buy an equal amount of shares of Aphria, HMMJ, and a handful of other stocks and then see what performs better. Of course, that is not realistic for many of us, nor the only solution. Luckily there are other ways. Hope you enjoyed your statistics classes.
How close can two variables have a linear relationship with each other? I guess that depends on how well the first date went. Oops, wrong answer. Back to stats, simple stats. The answer is its correlation. Simply put by Investopedia “Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1 and 1.” We can expect that companies that are performing similarly to others in the industry (using HMMJ the ETF as a reference here) would have a higher correlation. When the correlation becomes lower then there may be something going on that we would want to zoom in on the specific company and focus on. The correlation value becomes lower as it becomes moves less in tandem. This difference in correlation could either be positive or negative. This tool does not tell us. It is up to us to measure the difference. In our example below, we can See that Aphria’s prices compared to HMMJ have started going lower. This would be a good signal for us to zoom in on Aphria and evaluate