Correlation Between Canopy Growth and AdvisorShares Pure
Can any of the company-specific risk be diversified away by investing in both Canopy Growth and AdvisorShares Pure 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 AdvisorShares Pure 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 AdvisorShares Pure Cannabis, you can compare the effects of market volatilities on Canopy Growth and AdvisorShares Pure 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 AdvisorShares Pure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and AdvisorShares Pure.
Diversification Opportunities for Canopy Growth and AdvisorShares Pure
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Canopy and AdvisorShares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and AdvisorShares Pure Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Pure 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 AdvisorShares Pure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Pure has no effect on the direction of Canopy Growth i.e., Canopy Growth and AdvisorShares Pure go up and down completely randomly.
Pair Corralation between Canopy Growth and AdvisorShares Pure
Considering the 90-day investment horizon Canopy Growth Corp is expected to under-perform the AdvisorShares Pure. In addition to that, Canopy Growth is 1.58 times more volatile than AdvisorShares Pure Cannabis. It trades about -0.29 of its total potential returns per unit of risk. AdvisorShares Pure Cannabis is currently generating about 0.0 per unit of volatility. If you would invest 234.00 in AdvisorShares Pure Cannabis on October 20, 2024 and sell it today you would lose (1.00) from holding AdvisorShares Pure Cannabis or give up 0.43% 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. AdvisorShares Pure Cannabis
Performance |
| Timeline |
| Canopy Growth Corp |
| AdvisorShares Pure |
Canopy Growth and AdvisorShares Pure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canopy Growth and AdvisorShares Pure
The main advantage of trading using opposite Canopy Growth and AdvisorShares Pure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, AdvisorShares Pure 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 AdvisorShares Pure will offset losses from the drop in AdvisorShares Pure's long position.| Canopy Growth vs. WK Kellogg Co | Canopy Growth vs. FitLife Brands, Common | Canopy Growth vs. Lipocine | Canopy Growth vs. Tyson Foods |
| AdvisorShares Pure vs. Amplify Seymour Cannabis | AdvisorShares Pure vs. AdvisorShares Pure Cannabis | AdvisorShares Pure vs. Amplify ETF Trust |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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