Correlation Between Canopy Growth and Aldel Financial
Can any of the company-specific risk be diversified away by investing in both Canopy Growth and Aldel Financial 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 Canopy Growth and Aldel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canopy Growth Corp and Aldel Financial II, you can compare the effects of market volatilities on Canopy Growth and Aldel Financial 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 Canopy Growth with a short position of Aldel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and Aldel Financial.
Diversification Opportunities for Canopy Growth and Aldel Financial
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canopy and Aldel is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and Aldel Financial II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldel Financial II and Canopy Growth 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 Canopy Growth Corp are associated (or correlated) with Aldel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldel Financial II has no effect on the direction of Canopy Growth i.e., Canopy Growth and Aldel Financial go up and down completely randomly.
Pair Corralation between Canopy Growth and Aldel Financial
Considering the 90-day investment horizon Canopy Growth Corp is expected to under-perform the Aldel Financial. In addition to that, Canopy Growth is 57.39 times more volatile than Aldel Financial II. It trades about -0.21 of its total potential returns per unit of risk. Aldel Financial II is currently generating about 0.17 per unit of volatility. If you would invest 998.00 in Aldel Financial II on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Aldel Financial II or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canopy Growth Corp vs. Aldel Financial II
Performance |
| Timeline |
| Canopy Growth Corp |
| Aldel Financial II |
Canopy Growth and Aldel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canopy Growth and Aldel Financial
The main advantage of trading using opposite Canopy Growth and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, Aldel Financial 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 Aldel Financial will offset losses from the drop in Aldel Financial's long position.| Canopy Growth vs. Aldel Financial II | Canopy Growth vs. Highway Holdings Limited | Canopy Growth vs. Inflection Point Acquisition | Canopy Growth vs. Barrick Gold Corp |
| Aldel Financial vs. Organic Sales and | Aldel Financial vs. Sealed Air | Aldel Financial vs. Inuvo Inc | Aldel Financial vs. Fluent Inc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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