Correlation Between Canopy Growth and Ekso Bionics
Can any of the company-specific risk be diversified away by investing in both Canopy Growth and Ekso Bionics 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 Ekso Bionics 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 Ekso Bionics Holdings, you can compare the effects of market volatilities on Canopy Growth and Ekso Bionics 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 Ekso Bionics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and Ekso Bionics.
Diversification Opportunities for Canopy Growth and Ekso Bionics
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canopy and Ekso is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and Ekso Bionics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekso Bionics Holdings 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 Ekso Bionics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekso Bionics Holdings has no effect on the direction of Canopy Growth i.e., Canopy Growth and Ekso Bionics go up and down completely randomly.
Pair Corralation between Canopy Growth and Ekso Bionics
Considering the 90-day investment horizon Canopy Growth Corp is expected to under-perform the Ekso Bionics. In addition to that, Canopy Growth is 1.2 times more volatile than Ekso Bionics Holdings. It trades about -0.18 of its total potential returns per unit of risk. Ekso Bionics Holdings is currently generating about -0.19 per unit of volatility. If you would invest 135.00 in Ekso Bionics Holdings on March 7, 2024 and sell it today you would lose (23.00) from holding Ekso Bionics Holdings or give up 17.04% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Canopy Growth Corp vs. Ekso Bionics Holdings
Performance |
Timeline |
Canopy Growth Corp |
Ekso Bionics Holdings |
Canopy Growth and Ekso Bionics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canopy Growth and Ekso Bionics
The main advantage of trading using opposite Canopy Growth and Ekso Bionics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, Ekso Bionics 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 Ekso Bionics will offset losses from the drop in Ekso Bionics' long position.Canopy Growth vs. China SXT Pharmaceuticals | Canopy Growth vs. Petros Pharmaceuticals | Canopy Growth vs. GelStat Corp | Canopy Growth vs. Decibel Cannabis |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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