Correlation Between Aquestive Therapeutics and Canopy Growth
Can any of the company-specific risk be diversified away by investing in both Aquestive Therapeutics and Canopy Growth 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 Aquestive Therapeutics and Canopy Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquestive Therapeutics and Canopy Growth Corp, you can compare the effects of market volatilities on Aquestive Therapeutics and Canopy Growth 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 Aquestive Therapeutics with a short position of Canopy Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquestive Therapeutics and Canopy Growth.
Diversification Opportunities for Aquestive Therapeutics and Canopy Growth
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aquestive and Canopy is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aquestive Therapeutics and Canopy Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canopy Growth Corp and Aquestive Therapeutics 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 Aquestive Therapeutics are associated (or correlated) with Canopy Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canopy Growth Corp has no effect on the direction of Aquestive Therapeutics i.e., Aquestive Therapeutics and Canopy Growth go up and down completely randomly.
Pair Corralation between Aquestive Therapeutics and Canopy Growth
Given the investment horizon of 90 days Aquestive Therapeutics is expected to generate 0.54 times more return on investment than Canopy Growth. However, Aquestive Therapeutics is 1.87 times less risky than Canopy Growth. It trades about 0.08 of its potential returns per unit of risk. Canopy Growth Corp is currently generating about 0.0 per unit of risk. If you would invest 86.00 in Aquestive Therapeutics on September 14, 2024 and sell it today you would earn a total of 276.00 from holding Aquestive Therapeutics or generate 320.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aquestive Therapeutics vs. Canopy Growth Corp
Performance |
| Timeline |
| Aquestive Therapeutics |
| Canopy Growth Corp |
Aquestive Therapeutics and Canopy Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquestive Therapeutics and Canopy Growth
The main advantage of trading using opposite Aquestive Therapeutics and Canopy Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquestive Therapeutics position performs unexpectedly, Canopy Growth 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 Canopy Growth will offset losses from the drop in Canopy Growth's long position.| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
| Canopy Growth vs. Micron Technology | Canopy Growth vs. Sweetgreen | Canopy Growth vs. Ark Restaurants Corp | Canopy Growth vs. STMicroelectronics NV ADR |
Check out your portfolio center.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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