Correlation Between Ubiquitech Software and Canopy Growth

Can any of the company-specific risk be diversified away by investing in both Ubiquitech Software 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 Ubiquitech Software and Canopy Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ubiquitech Software and Canopy Growth Corp, you can compare the effects of market volatilities on Ubiquitech Software 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 Ubiquitech Software with a short position of Canopy Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubiquitech Software and Canopy Growth.

Diversification Opportunities for Ubiquitech Software and Canopy Growth

0.24

Correlation Coefficient

Ubiquitech Software  Canopy Growth

Modest diversification

The 3 months correlation between Ubiquitech and Canopy is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ubiquitech Software 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 Ubiquitech Software 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 Ubiquitech Software 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 Ubiquitech Software i.e., Ubiquitech Software and Canopy Growth go up and down completely randomly.

Pair Corralation between Ubiquitech Software and Canopy Growth

Given the investment horizon of 90 days Ubiquitech Software is expected to generate 62.38 times more return on investment than Canopy Growth. However, Ubiquitech Software is 62.38 times more volatile than Canopy Growth Corp. It trades about 0.3 of its potential returns per unit of risk. Canopy Growth Corp is currently generating about -0.13 per unit of risk. If you would invest  0.01  in Ubiquitech Software on September 19, 2024 and sell it today you would lose (0.01) from holding Ubiquitech Software or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Ubiquitech Software  vs.  Canopy Growth Corp

Ubiquitech Software

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ubiquitech Software are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Ubiquitech Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Canopy Growth Corp

Risk-Adjusted Performance

0 of 100

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 conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Ubiquitech Software and Canopy Growth

The main advantage of trading using opposite Ubiquitech Software and Canopy Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubiquitech Software 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.

The idea behind Ubiquitech Software and Canopy Growth Corp 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..