Correlation Between Canopy Growth and FTAI Aviation

Can any of the company-specific risk be diversified away by investing in both Canopy Growth and FTAI Aviation 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 FTAI Aviation 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 FTAI Aviation Ltd, you can compare the effects of market volatilities on Canopy Growth and FTAI Aviation 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 FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canopy Growth and FTAI Aviation.

Diversification Opportunities for Canopy Growth and FTAI Aviation

-0.38

Correlation Coefficient

Canopy Growth  FTAI Aviation

Very good diversification

The 3 months correlation between Canopy and FTAI is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Canopy Growth Corp and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation 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 FTAI Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Aviation has no effect on the direction of Canopy Growth i.e., Canopy Growth and FTAI Aviation go up and down completely randomly.

Pair Corralation between Canopy Growth and FTAI Aviation

Considering the 90-day investment horizon Canopy Growth Corp is expected to under-perform the FTAI Aviation. In addition to that, Canopy Growth is 8.25 times more volatile than FTAI Aviation Ltd. It trades about -0.01 of its total potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.06 per unit of volatility. If you would invest  2,588  in FTAI Aviation Ltd on May 5, 2025 and sell it today you would earn a total of  86.00  from holding FTAI Aviation Ltd or generate 3.32% return on investment over 90 days.

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

Canopy Growth Corp  vs.  FTAI Aviation Ltd

Canopy Growth Corp

Risk-Adjusted Performance

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 rather sound technical and fundamental indicators, Canopy Growth is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

FTAI Aviation

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FTAI Aviation Ltd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, FTAI Aviation is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Canopy Growth and FTAI Aviation

The main advantage of trading using opposite Canopy Growth and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canopy Growth position performs unexpectedly, FTAI Aviation 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 FTAI Aviation will offset losses from the drop in FTAI Aviation's long position.

The idea behind Canopy Growth Corp and FTAI Aviation Ltd 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.