Correlation Between Empire Global and CLS Holdings
Can any of the company-specific risk be diversified away by investing in both Empire Global 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 Empire Global and CLS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Global Gaming and CLS Holdings USA, you can compare the effects of market volatilities on Empire Global 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 Empire Global with a short position of CLS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Global and CLS Holdings.
Diversification Opportunities for Empire Global and CLS Holdings
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and CLS is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Empire Global Gaming 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 Empire Global 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 Empire Global Gaming 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 Empire Global i.e., Empire Global and CLS Holdings go up and down completely randomly.
Pair Corralation between Empire Global and CLS Holdings
Given the investment horizon of 90 days Empire Global Gaming is expected to under-perform the CLS Holdings. In addition to that, Empire Global is 1.67 times more volatile than CLS Holdings USA. It trades about -0.22 of its total potential returns per unit of risk. CLS Holdings USA is currently generating about 0.0 per unit of volatility. 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 |
Empire Global Gaming vs. CLS Holdings USA
Performance |
| Timeline |
| Empire Global Gaming |
| CLS Holdings USA |
Empire Global and CLS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Global and CLS Holdings
The main advantage of trading using opposite Empire Global and CLS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Global 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.| Empire Global vs. Churchill Downs Incorporated | Empire Global vs. Gan | Empire Global vs. Rush Street Interactive | Empire Global vs. Lottery, Common Stock |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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