Correlation Between Canopy Growth and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Canopy Growth and Aquestive Therapeutics 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 Aquestive Therapeutics 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 Aquestive Therapeutics, you can compare the effects of market volatilities on Canopy Growth and Aquestive Therapeutics 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 Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and Aquestive Therapeutics.
Diversification Opportunities for Canopy Growth and Aquestive Therapeutics
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Canopy and Aquestive is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics 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 Aquestive Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquestive Therapeutics has no effect on the direction of Canopy Growth i.e., Canopy Growth and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Canopy Growth and Aquestive Therapeutics
Considering the 90-day investment horizon Canopy Growth Corp is expected to under-perform the Aquestive Therapeutics. In addition to that, Canopy Growth is 1.06 times more volatile than Aquestive Therapeutics. It trades about -0.46 of its total potential returns per unit of risk. Aquestive Therapeutics is currently generating about -0.27 per unit of volatility. If you would invest 367.00 in Aquestive Therapeutics on November 2, 2024 and sell it today you would lose (59.00) from holding Aquestive Therapeutics or give up 16.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canopy Growth Corp vs. Aquestive Therapeutics
Performance |
| Timeline |
| Canopy Growth Corp |
| Aquestive Therapeutics |
Canopy Growth and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canopy Growth and Aquestive Therapeutics
The main advantage of trading using opposite Canopy Growth and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, Aquestive Therapeutics 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 Aquestive Therapeutics will offset losses from the drop in Aquestive Therapeutics' long position.| Canopy Growth vs. ioneer Ltd American | Canopy Growth vs. Summa Silver Corp | Canopy Growth vs. Vindicator Silver Lead Mining | Canopy Growth vs. Entravision Communications |
| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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