Correlation Between Canopy Growth and CanSino Biologics
Can any of the company-specific risk be diversified away by investing in both Canopy Growth and CanSino Biologics 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 CanSino Biologics 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 CanSino Biologics, you can compare the effects of market volatilities on Canopy Growth and CanSino Biologics 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 CanSino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and CanSino Biologics.
Diversification Opportunities for Canopy Growth and CanSino Biologics
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canopy and CanSino is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and CanSino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanSino Biologics 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 CanSino Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanSino Biologics has no effect on the direction of Canopy Growth i.e., Canopy Growth and CanSino Biologics go up and down completely randomly.
Pair Corralation between Canopy Growth and CanSino Biologics
Considering the 90-day investment horizon Canopy Growth Corp is expected to under-perform the CanSino Biologics. In addition to that, Canopy Growth is 1.57 times more volatile than CanSino Biologics. It trades about -0.39 of its total potential returns per unit of risk. CanSino Biologics is currently generating about -0.4 per unit of volatility. If you would invest 400.00 in CanSino Biologics on October 30, 2024 and sell it today you would lose (63.00) from holding CanSino Biologics or give up 15.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canopy Growth Corp vs. CanSino Biologics
Performance |
| Timeline |
| Canopy Growth Corp |
| CanSino Biologics |
Canopy Growth and CanSino Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canopy Growth and CanSino Biologics
The main advantage of trading using opposite Canopy Growth and CanSino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, CanSino Biologics 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 CanSino Biologics will offset losses from the drop in CanSino Biologics' long position.| Canopy Growth vs. Sun Country Airlines | Canopy Growth vs. Merit Medical Systems | Canopy Growth vs. Teleflex Incorporated | Canopy Growth vs. National Vision Holdings |
| CanSino Biologics vs. Canopy Growth Corp | CanSino Biologics vs. Aurora Cannabis | CanSino Biologics vs. SNDL Inc | CanSino Biologics vs. Cronos Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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