Correlation Between Canopy Growth and Pure Global
Can any of the company-specific risk be diversified away by investing in both Canopy Growth and Pure Global 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 Pure Global 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 Pure Global Cannabis, you can compare the effects of market volatilities on Canopy Growth and Pure Global 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 Pure Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and Pure Global.
Diversification Opportunities for Canopy Growth and Pure Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Canopy and Pure is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and Pure Global Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Global Cannabis 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 Pure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Global Cannabis has no effect on the direction of Canopy Growth i.e., Canopy Growth and Pure Global go up and down completely randomly.
Pair Corralation between Canopy Growth and Pure Global
If you would invest 694.00 in Canopy Growth Corp on August 31, 2024 and sell it today you would lose (307.00) from holding Canopy Growth Corp or give up 44.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Canopy Growth Corp vs. Pure Global Cannabis
Performance |
| Timeline |
| Canopy Growth Corp |
| Pure Global Cannabis |
Canopy Growth and Pure Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canopy Growth and Pure Global
The main advantage of trading using opposite Canopy Growth and Pure Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, Pure Global 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 Pure Global will offset losses from the drop in Pure Global's long position.| Canopy Growth vs. Sanyo Special Steel | Canopy Growth vs. Century Aluminum | Canopy Growth vs. Titan International | Canopy Growth vs. Viemed Healthcare |
| Pure Global vs. Holloman Energy Corp | Pure Global vs. cbdMD Inc | Pure Global vs. Evolus Inc | Pure Global vs. CV Sciences |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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