Correlation Between Codexis and Canopy Growth
Can any of the company-specific risk be diversified away by investing in both Codexis 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 Codexis and Canopy Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Codexis and Canopy Growth Corp, you can compare the effects of market volatilities on Codexis 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 Codexis with a short position of Canopy Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codexis and Canopy Growth.
Diversification Opportunities for Codexis and Canopy Growth
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Codexis and Canopy is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Codexis 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 Codexis 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 Codexis 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 Codexis i.e., Codexis and Canopy Growth go up and down completely randomly.
Pair Corralation between Codexis and Canopy Growth
Given the investment horizon of 90 days Codexis is expected to generate 0.9 times more return on investment than Canopy Growth. However, Codexis is 1.11 times less risky than Canopy Growth. It trades about 0.07 of its potential returns per unit of risk. Canopy Growth Corp is currently generating about -0.09 per unit of risk. If you would invest 348.00 in Codexis on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Codexis or generate 31.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Codexis vs. Canopy Growth Corp
Performance |
| Timeline |
| Codexis |
| Canopy Growth Corp |
Codexis and Canopy Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Codexis and Canopy Growth
The main advantage of trading using opposite Codexis and Canopy Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Codexis 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.| Codexis vs. Verve Therapeutics | Codexis vs. Beam Therapeutics | Codexis vs. Caribou Biosciences | Codexis vs. Sana Biotechnology |
| Canopy Growth vs. Crinetics Pharmaceuticals | Canopy Growth vs. Enanta Pharmaceuticals | Canopy Growth vs. Amicus Therapeutics | Canopy Growth vs. Connect Biopharma Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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