Correlation Between CLS Holdings and West Island
Can any of the company-specific risk be diversified away by investing in both CLS Holdings and West Island 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 West Island 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 West Island Brands, you can compare the effects of market volatilities on CLS Holdings and West Island 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 West Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLS Holdings and West Island.
Diversification Opportunities for CLS Holdings and West Island
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CLS and West is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CLS Holdings USA and West Island Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Island Brands 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 West Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Island Brands has no effect on the direction of CLS Holdings i.e., CLS Holdings and West Island go up and down completely randomly.
Pair Corralation between CLS Holdings and West Island
Given the investment horizon of 90 days CLS Holdings is expected to generate 12.9 times less return on investment than West Island. But when comparing it to its historical volatility, CLS Holdings USA is 7.69 times less risky than West Island. It trades about 0.05 of its potential returns per unit of risk. West Island Brands is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.06 in West Island Brands on August 29, 2024 and sell it today you would earn a total of 0.29 from holding West Island Brands or generate 483.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CLS Holdings USA vs. West Island Brands
Performance |
| Timeline |
| CLS Holdings USA |
| West Island Brands |
CLS Holdings and West Island Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CLS Holdings and West Island
The main advantage of trading using opposite CLS Holdings and West Island positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLS Holdings position performs unexpectedly, West Island 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 West Island will offset losses from the drop in West Island's 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 |
| West Island vs. Canopy Growth Corp | West Island vs. Tilray Inc | West Island vs. Cronos Group | West Island vs. SNDL Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |