Correlation Between Canopy Growth and BlackBerry
Can any of the company-specific risk be diversified away by investing in both Canopy Growth and BlackBerry 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 BlackBerry 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 BlackBerry, you can compare the effects of market volatilities on Canopy Growth and BlackBerry 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 BlackBerry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and BlackBerry.
Diversification Opportunities for Canopy Growth and BlackBerry
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canopy and BlackBerry is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and BlackBerry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackBerry 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 BlackBerry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackBerry has no effect on the direction of Canopy Growth i.e., Canopy Growth and BlackBerry go up and down completely randomly.
Pair Corralation between Canopy Growth and BlackBerry
Assuming the 90 days trading horizon Canopy Growth Corp is expected to under-perform the BlackBerry. In addition to that, Canopy Growth is 1.69 times more volatile than BlackBerry. It trades about -0.1 of its total potential returns per unit of risk. BlackBerry is currently generating about 0.07 per unit of volatility. If you would invest 318.00 in BlackBerry on September 13, 2024 and sell it today you would earn a total of 76.00 from holding BlackBerry or generate 23.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canopy Growth Corp vs. BlackBerry
Performance |
| Timeline |
| Canopy Growth Corp |
| BlackBerry |
Canopy Growth and BlackBerry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canopy Growth and BlackBerry
The main advantage of trading using opposite Canopy Growth and BlackBerry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, BlackBerry 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 BlackBerry will offset losses from the drop in BlackBerry's long position.| Canopy Growth vs. Aurora Cannabis | Canopy Growth vs. Cronos Group | Canopy Growth vs. Air Canada | Canopy Growth vs. Shopify |
| BlackBerry vs. Air Canada | BlackBerry vs. Lightspeed Commerce | BlackBerry vs. Shopify | BlackBerry vs. Suncor Energy |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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