Correlation Between CLS Holdings and Cresco Labs
Can any of the company-specific risk be diversified away by investing in both CLS Holdings and Cresco Labs 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 CLS Holdings and Cresco Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CLS Holdings USA and Cresco Labs, you can compare the effects of market volatilities on CLS Holdings and Cresco Labs 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 CLS Holdings with a short position of Cresco Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLS Holdings and Cresco Labs.
Diversification Opportunities for CLS Holdings and Cresco Labs
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CLS and Cresco is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CLS Holdings USA and Cresco Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresco Labs and CLS Holdings 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 CLS Holdings USA are associated (or correlated) with Cresco Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresco Labs has no effect on the direction of CLS Holdings i.e., CLS Holdings and Cresco Labs go up and down completely randomly.
Pair Corralation between CLS Holdings and Cresco Labs
Given the investment horizon of 90 days CLS Holdings USA is expected to generate 1.33 times more return on investment than Cresco Labs. However, CLS Holdings is 1.33 times more volatile than Cresco Labs. It trades about 0.05 of its potential returns per unit of risk. Cresco Labs is currently generating about -0.09 per unit of risk. If you would invest 5.00 in CLS Holdings USA on August 29, 2024 and sell it today you would earn a total of 0.00 from holding CLS Holdings USA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CLS Holdings USA vs. Cresco Labs
Performance |
| Timeline |
| CLS Holdings USA |
| Cresco Labs |
CLS Holdings and Cresco Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CLS Holdings and Cresco Labs
The main advantage of trading using opposite CLS Holdings and Cresco Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLS Holdings position performs unexpectedly, Cresco Labs 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 Cresco Labs will offset losses from the drop in Cresco Labs' long position.| CLS Holdings vs. Benchmark Botanics | CLS Holdings vs. Speakeasy Cannabis Club | CLS Holdings vs. City View Green | CLS Holdings vs. BC Craft Supply |
| Cresco Labs vs. Green Cures Botanical | Cresco Labs vs. Cann American Corp | Cresco Labs vs. Rimrock Gold Corp | Cresco Labs vs. Galexxy Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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