A canker worm is actually the larval form of a moth. When you see a canker worm, it is a cute little baby moth, enjoying life and exploring it's new world. They are hanging from trees because they are trying to get into the ground below the tree. When they reach the ground they burrow in and create a cocoon. There they wait, transforming into their adult form.
They will hatch from their cocoons sometime in the fall, when things start to cool off. At that point they will breed. The females (who are wingless) crawl up the tree to lay their eggs. That way, next year, there will be plenty of icky inchworms hanging from trees and getting in your clothes.
This is why the best way to handle canker worm infestations it to band your trees. This prevents the female moths from crawling up the tree and laying their eggs.