Correlation Between Canopy Growth and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both Canopy Growth and Bank Leumi 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 Bank Leumi 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 Bank Leumi Le Israel, you can compare the effects of market volatilities on Canopy Growth and Bank Leumi 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 Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and Bank Leumi.
Diversification Opportunities for Canopy Growth and Bank Leumi
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canopy and Bank is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and Bank Leumi Le Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Leumi Le 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 Bank Leumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Leumi Le has no effect on the direction of Canopy Growth i.e., Canopy Growth and Bank Leumi go up and down completely randomly.
Pair Corralation between Canopy Growth and Bank Leumi
Considering the 90-day investment horizon Canopy Growth Corp is expected to generate 5.64 times more return on investment than Bank Leumi. However, Canopy Growth is 5.64 times more volatile than Bank Leumi Le Israel. It trades about 0.04 of its potential returns per unit of risk. Bank Leumi Le Israel is currently generating about 0.02 per unit of risk. If you would invest 1,290 in Canopy Growth Corp on January 26, 2024 and sell it today you would lose (393.00) from holding Canopy Growth Corp or give up 30.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.65% |
| Values | Daily Returns |
Canopy Growth Corp vs. Bank Leumi Le Israel
Performance |
| Timeline |
| Canopy Growth Corp |
| Bank Leumi Le |
Canopy Growth and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canopy Growth and Bank Leumi
The main advantage of trading using opposite Canopy Growth and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, Bank Leumi 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 Bank Leumi will offset losses from the drop in Bank Leumi's long position.| Canopy Growth vs. Silo Pharma | Canopy Growth vs. RBC Bearings Incorporated | Canopy Growth vs. Levi Strauss Co | Canopy Growth vs. Merit Medical Systems |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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