Correlation Between Canopy Growth and Crinetics Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Canopy Growth and Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals, you can compare the effects of market volatilities on Canopy Growth and Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and Crinetics Pharmaceuticals.
Diversification Opportunities for Canopy Growth and Crinetics Pharmaceuticals
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canopy and Crinetics is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and Crinetics Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crinetics Pharmaceuticals has no effect on the direction of Canopy Growth i.e., Canopy Growth and Crinetics Pharmaceuticals go up and down completely randomly.
Pair Corralation between Canopy Growth and Crinetics Pharmaceuticals
Considering the 90-day investment horizon Canopy Growth Corp is expected to under-perform the Crinetics Pharmaceuticals. In addition to that, Canopy Growth is 2.35 times more volatile than Crinetics Pharmaceuticals. It trades about -0.35 of its total potential returns per unit of risk. Crinetics Pharmaceuticals is currently generating about 0.0 per unit of volatility. If you would invest 5,682 in Crinetics Pharmaceuticals on September 4, 2024 and sell it today you would lose (23.00) from holding Crinetics Pharmaceuticals or give up 0.4% 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. Crinetics Pharmaceuticals
Performance |
| Timeline |
| Canopy Growth Corp |
| Crinetics Pharmaceuticals |
Canopy Growth and Crinetics Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canopy Growth and Crinetics Pharmaceuticals
The main advantage of trading using opposite Canopy Growth and Crinetics Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals will offset losses from the drop in Crinetics Pharmaceuticals' long position.| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |