Correlation Between Canopy Growth and Hamilton Beach
Can any of the company-specific risk be diversified away by investing in both Canopy Growth and Hamilton Beach 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 Hamilton Beach 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 Hamilton Beach Brands, you can compare the effects of market volatilities on Canopy Growth and Hamilton Beach 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 Hamilton Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and Hamilton Beach.
Diversification Opportunities for Canopy Growth and Hamilton Beach
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Canopy and Hamilton is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and Hamilton Beach Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Beach Brands 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 Hamilton Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Beach Brands has no effect on the direction of Canopy Growth i.e., Canopy Growth and Hamilton Beach go up and down completely randomly.
Pair Corralation between Canopy Growth and Hamilton Beach
Considering the 90-day investment horizon Canopy Growth is expected to generate 1.64 times less return on investment than Hamilton Beach. In addition to that, Canopy Growth is 3.57 times more volatile than Hamilton Beach Brands. It trades about 0.01 of its total potential returns per unit of risk. Hamilton Beach Brands is currently generating about 0.07 per unit of volatility. If you would invest 1,255 in Hamilton Beach Brands on January 21, 2024 and sell it today you would earn a total of 858.00 from holding Hamilton Beach Brands or generate 68.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canopy Growth Corp vs. Hamilton Beach Brands
Performance |
| Timeline |
| Canopy Growth Corp |
| Hamilton Beach Brands |
Canopy Growth and Hamilton Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canopy Growth and Hamilton Beach
The main advantage of trading using opposite Canopy Growth and Hamilton Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, Hamilton Beach 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 Hamilton Beach will offset losses from the drop in Hamilton Beach's long position.| Canopy Growth vs. Alkermes Plc | Canopy Growth vs. Ironwood Pharmaceuticals | Canopy Growth vs. Deciphera Pharmaceuticals LLC | Canopy Growth vs. Eagle Pharmaceuticals |
| Hamilton Beach vs. Meta Materials | Hamilton Beach vs. Sphere 3D Corp | Hamilton Beach vs. Katapult Holdings | Hamilton Beach vs. Aquagold International |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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