Correlation Between Mallinckrodt Plc and Canopy Growth
Can any of the company-specific risk be diversified away by investing in both Mallinckrodt Plc and Canopy Growth 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 Mallinckrodt Plc and Canopy Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mallinckrodt Plc and Canopy Growth Corp, you can compare the effects of market volatilities on Mallinckrodt Plc and Canopy Growth 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 Mallinckrodt Plc with a short position of Canopy Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mallinckrodt Plc and Canopy Growth.
Diversification Opportunities for Mallinckrodt Plc and Canopy Growth
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mallinckrodt and Canopy is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mallinckrodt Plc and Canopy Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canopy Growth Corp and Mallinckrodt Plc 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 Mallinckrodt Plc are associated (or correlated) with Canopy Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canopy Growth Corp has no effect on the direction of Mallinckrodt Plc i.e., Mallinckrodt Plc and Canopy Growth go up and down completely randomly.
Pair Corralation between Mallinckrodt Plc and Canopy Growth
Considering the 90-day investment horizon Mallinckrodt Plc is expected to generate 4.14 times more return on investment than Canopy Growth. However, Mallinckrodt Plc is 4.14 times more volatile than Canopy Growth Corp. It trades about 0.01 of its potential returns per unit of risk. Canopy Growth Corp is currently generating about 0.0 per unit of risk. If you would invest 836.00 in Mallinckrodt Plc on September 14, 2024 and sell it today you would lose (790.00) from holding Mallinckrodt Plc or give up 94.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 29.15% |
| Values | Daily Returns |
Mallinckrodt Plc vs. Canopy Growth Corp
Performance |
| Timeline |
| Mallinckrodt Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Canopy Growth Corp |
Mallinckrodt Plc and Canopy Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mallinckrodt Plc and Canopy Growth
The main advantage of trading using opposite Mallinckrodt Plc and Canopy Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mallinckrodt Plc position performs unexpectedly, Canopy Growth 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 Canopy Growth will offset losses from the drop in Canopy Growth's long position.| Mallinckrodt Plc vs. Lifecore Biomedical | Mallinckrodt Plc vs. Shuttle Pharmaceuticals | Mallinckrodt Plc vs. Organogenesis Holdings | Mallinckrodt Plc vs. Journey Medical Corp |
| Canopy Growth vs. Micron Technology | Canopy Growth vs. Sweetgreen | Canopy Growth vs. Ark Restaurants Corp | Canopy Growth vs. STMicroelectronics NV ADR |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |