Correlation Between Cipher Pharmaceuticals and Canopy Growth
Can any of the company-specific risk be diversified away by investing in both Cipher Pharmaceuticals and Canopy Growth 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 Cipher Pharmaceuticals and Canopy Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cipher Pharmaceuticals and Canopy Growth Corp, you can compare the effects of market volatilities on Cipher Pharmaceuticals and Canopy Growth 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 Cipher Pharmaceuticals with a short position of Canopy Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cipher Pharmaceuticals and Canopy Growth.
Diversification Opportunities for Cipher Pharmaceuticals and Canopy Growth
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cipher and Canopy is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cipher Pharmaceuticals and Canopy Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canopy Growth Corp and Cipher Pharmaceuticals 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 Cipher Pharmaceuticals are associated (or correlated) with Canopy Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canopy Growth Corp has no effect on the direction of Cipher Pharmaceuticals i.e., Cipher Pharmaceuticals and Canopy Growth go up and down completely randomly.
Pair Corralation between Cipher Pharmaceuticals and Canopy Growth
Assuming the 90 days trading horizon Cipher Pharmaceuticals is expected to generate 0.38 times more return on investment than Canopy Growth. However, Cipher Pharmaceuticals is 2.66 times less risky than Canopy Growth. It trades about -0.05 of its potential returns per unit of risk. Canopy Growth Corp is currently generating about -0.02 per unit of risk. If you would invest 1,449 in Cipher Pharmaceuticals on August 18, 2025 and sell it today you would lose (134.00) from holding Cipher Pharmaceuticals or give up 9.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cipher Pharmaceuticals vs. Canopy Growth Corp
Performance |
| Timeline |
| Cipher Pharmaceuticals |
| Canopy Growth Corp |
Cipher Pharmaceuticals and Canopy Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cipher Pharmaceuticals and Canopy Growth
The main advantage of trading using opposite Cipher Pharmaceuticals and Canopy Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cipher Pharmaceuticals position performs unexpectedly, Canopy Growth 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 Canopy Growth will offset losses from the drop in Canopy Growth's long position.| Cipher Pharmaceuticals vs. Canopy Growth Corp | Cipher Pharmaceuticals vs. OrganiGram Holdings | Cipher Pharmaceuticals vs. TerrAscend Corp | Cipher Pharmaceuticals vs. Aurora Cannabis |
| Canopy Growth vs. Cipher Pharmaceuticals | Canopy Growth vs. OrganiGram Holdings | Canopy Growth vs. TerrAscend Corp | Canopy Growth vs. Aurora Cannabis |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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