Correlation Between Canopy Growth and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Canopy Growth and Berkshire Hathaway 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 Berkshire Hathaway 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 Berkshire Hathaway CDR, you can compare the effects of market volatilities on Canopy Growth and Berkshire Hathaway 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 Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and Berkshire Hathaway.
Diversification Opportunities for Canopy Growth and Berkshire Hathaway
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canopy and Berkshire is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and Berkshire Hathaway CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway CDR 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 Berkshire Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway CDR has no effect on the direction of Canopy Growth i.e., Canopy Growth and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Canopy Growth and Berkshire Hathaway
Assuming the 90 days trading horizon Canopy Growth Corp is expected to generate 15.73 times more return on investment than Berkshire Hathaway. However, Canopy Growth is 15.73 times more volatile than Berkshire Hathaway CDR. It trades about 0.06 of its potential returns per unit of risk. Berkshire Hathaway CDR is currently generating about 0.09 per unit of risk. If you would invest 930.00 in Canopy Growth Corp on January 30, 2024 and sell it today you would earn a total of 285.00 from holding Canopy Growth Corp or generate 30.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Canopy Growth Corp vs. Berkshire Hathaway CDR
Performance |
Timeline |
Canopy Growth Corp |
Berkshire Hathaway CDR |
Canopy Growth and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canopy Growth and Berkshire Hathaway
The main advantage of trading using opposite Canopy Growth and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, Berkshire Hathaway 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 Berkshire Hathaway will offset losses from the drop in Berkshire Hathaway's long position.Canopy Growth vs. DelphX Capital Markets | Canopy Growth vs. Citadel Income | Canopy Growth vs. S Split Corp |
Berkshire Hathaway vs. HIVE Blockchain Technologies | Berkshire Hathaway vs. Advent Wireless | Berkshire Hathaway vs. Exco Technologies Limited | Berkshire Hathaway vs. Oncolytics Biotech |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Fundamental Analysis View fundamental data based on most recent published financial statements |