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If you’re an Aurora Cannabis (NYSE:ACB) investor, you’ve probably endured some pain and significant losses over the past year. Shares of the popular pot stock are down more than 87% in just 12 months. For that matter, marijuana stocks as a whole aren’t doing terribly well, with the Horizons Marijuana Life Science ETF (OTC:HMLS.F) declining by about 60% during the same period.

And that’s why if you’re already holding shares of Aurora, you may want to look at diversifying into stocks in other industries, ones that won’t compound your risk the way investing in other cannabis stocks will. Here are two stocks that can help add some stability to your portfolio and minimize your overall risk.

1. Snap

Snap (NYSE:SNAP) is a tech stock that’s centered on its popular camera app for phones, Snapchat, which allows people to add filters to their pictures and videos and then share them with friends. Since it doesn’t overlap with cannabis, Snap is a great way to diversify outside of the marijuana industry. 

The words "Are you diversified?" written in white chalk on a black notebook page.

Image source: Getty Images.

The good news for Aurora investors is that Snap’s been doing well lately. In its second-quarter results, the California-based company said its sales were up 17%. Its daily active users totaled 238 million, also up 17%. As people are staying home amid the COVID-19 pandemic, Snap is benefiting from more of them using its app. 

What’s also great is that, with a correlation of less than 0.3, there’s nothing to suggest that these stocks will move together in the same direction.

SNAP Chart

SNAP data by YCharts.

Investing in Snap can be a great way to take advantage of its user growth amid the pandemic and an opportunity to lessen your dependence on the cannabis industry for strong returns.

2. Costco

Costco Wholesale (NASDAQ:COST) is another company that’s doing well this year. In its third-quarter results, released May 28, sales were up 7.3% and comparable e-commerce revenue grew by 64.5%.

The company’s warehouses are a popular option for consumers looking to stockpile goods during the pandemic — which is exactly what’s continuing to happen. On Aug. 5, the Washington-based company released July sales numbers that were up 14.1% from a year ago, reaching $13 billion for the four-week period ending Aug. 2.

Costco also pays its shareholders a quarterly dividend of $0.70, which today yields 0.83%. Although that’s well below the S&P 500 average of 2%, it’s still better than nothing; neither Snap nor Aurora currently offers shareholders a regular payout.

The stock is also even less correlated to Aurora’s stock than Snap is:

COST Chart

COST data by YCharts.

With a near-zero correlation, Costco’s stock offers Aurora investors another great way to diversify their portfolios. 

Which stock should you buy?

If you want to bring down your portfolio’s risk, consider investing in both Costco and Snap. Earning a decent return on those two stocks can help make it easier to stomach any losses you incur from Aurora while you wait for the pot stock to turn things around.

However, if you can only invest in one stock today, I’d suggest buying shares of Costco. While Snap’s been picking up steam and has been a good turnaround story of its own, Costco is the safer buy. The company is the only one of the three that consistently books a profit. And with strong numbers yet again for July, there’s little reason to be concerned about its future. The business has proven to be resilient and a great investment in both good times and bad.

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