Correlation Between Cresco Labs and CLS Holdings
Can any of the company-specific risk be diversified away by investing in both Cresco Labs and CLS Holdings 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 Cresco Labs and CLS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cresco Labs and CLS Holdings USA, you can compare the effects of market volatilities on Cresco Labs and CLS Holdings 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 Cresco Labs with a short position of CLS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresco Labs and CLS Holdings.
Diversification Opportunities for Cresco Labs and CLS Holdings
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cresco and CLS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cresco Labs and CLS Holdings USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLS Holdings USA and Cresco Labs 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 Cresco Labs are associated (or correlated) with CLS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLS Holdings USA has no effect on the direction of Cresco Labs i.e., Cresco Labs and CLS Holdings go up and down completely randomly.
Pair Corralation between Cresco Labs and CLS Holdings
Assuming the 90 days horizon Cresco Labs is expected to under-perform the CLS Holdings. But the otc stock apears to be less risky and, when comparing its historical volatility, Cresco Labs is 1.35 times less risky than CLS Holdings. The otc stock trades about -0.03 of its potential returns per unit of risk. The CLS Holdings USA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 5.00 in CLS Holdings USA on September 1, 2024 and sell it today you would lose (0.71) from holding CLS Holdings USA or give up 14.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cresco Labs vs. CLS Holdings USA
Performance |
| Timeline |
| Cresco Labs |
| CLS Holdings USA |
Cresco Labs and CLS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cresco Labs and CLS Holdings
The main advantage of trading using opposite Cresco Labs and CLS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresco Labs position performs unexpectedly, CLS Holdings 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 CLS Holdings will offset losses from the drop in CLS Holdings' long position.| Cresco Labs vs. Verano Holdings Corp | Cresco Labs vs. AYR Strategies Class | Cresco Labs vs. Green Thumb Industries | Cresco Labs vs. Marimed |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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