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

Canopy Growth  Pure Global

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  0.00  in Pure Global Cannabis on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Pure Global Cannabis or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Canopy Growth Corp  vs.  Pure Global Cannabis

Canopy Growth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canopy Growth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pure Global Cannabis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pure Global Cannabis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pure Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

The idea behind Canopy Growth Corp and Pure Global Cannabis pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.