Correlation Between CLS Holdings and YourWay Cannabis
Can any of the company-specific risk be diversified away by investing in both CLS Holdings and YourWay Cannabis 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 YourWay Cannabis 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 YourWay Cannabis Brands, you can compare the effects of market volatilities on CLS Holdings and YourWay Cannabis 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 YourWay Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLS Holdings and YourWay Cannabis.
Diversification Opportunities for CLS Holdings and YourWay Cannabis
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CLS and YourWay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CLS Holdings USA and YourWay Cannabis Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YourWay Cannabis 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 YourWay Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YourWay Cannabis Brands has no effect on the direction of CLS Holdings i.e., CLS Holdings and YourWay Cannabis go up and down completely randomly.
Pair Corralation between CLS Holdings and YourWay Cannabis
Given the investment horizon of 90 days CLS Holdings is expected to generate 8.69 times less return on investment than YourWay Cannabis. But when comparing it to its historical volatility, CLS Holdings USA is 6.52 times less risky than YourWay Cannabis. It trades about 0.05 of its potential returns per unit of risk. YourWay Cannabis Brands is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4.00 in YourWay Cannabis Brands on August 30, 2024 and sell it today you would lose (4.00) from holding YourWay Cannabis Brands or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CLS Holdings USA vs. YourWay Cannabis Brands
Performance |
| Timeline |
| CLS Holdings USA |
| YourWay Cannabis Brands |
CLS Holdings and YourWay Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CLS Holdings and YourWay Cannabis
The main advantage of trading using opposite CLS Holdings and YourWay Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLS Holdings position performs unexpectedly, YourWay Cannabis 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 YourWay Cannabis will offset losses from the drop in YourWay Cannabis' 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 |
| YourWay Cannabis vs. Decibel Cannabis | YourWay Cannabis vs. Delta 9 Cannabis | YourWay Cannabis vs. Body and Mind | YourWay Cannabis vs. CLS Holdings USA |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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