Correlation Between 4Front Ventures and CLS Holdings
Can any of the company-specific risk be diversified away by investing in both 4Front Ventures 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 4Front Ventures and CLS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 4Front Ventures Corp and CLS Holdings USA, you can compare the effects of market volatilities on 4Front Ventures 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 4Front Ventures with a short position of CLS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4Front Ventures and CLS Holdings.
Diversification Opportunities for 4Front Ventures and CLS Holdings
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 4Front and CLS is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding 4Front Ventures Corp 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 4Front Ventures 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 4Front Ventures Corp 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 4Front Ventures i.e., 4Front Ventures and CLS Holdings go up and down completely randomly.
Pair Corralation between 4Front Ventures and CLS Holdings
Assuming the 90 days horizon 4Front Ventures is expected to generate 117.14 times less return on investment than CLS Holdings. But when comparing it to its historical volatility, 4Front Ventures Corp is 1.06 times less risky than CLS Holdings. It trades about 0.0 of its potential returns per unit of risk. CLS Holdings USA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5.27 in CLS Holdings USA on November 27, 2024 and sell it today you would lose (2.58) from holding CLS Holdings USA or give up 48.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
4Front Ventures Corp vs. CLS Holdings USA
Performance |
| Timeline |
| 4Front Ventures Corp |
| CLS Holdings USA |
4Front Ventures and CLS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4Front Ventures and CLS Holdings
The main advantage of trading using opposite 4Front Ventures and CLS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4Front Ventures 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.| 4Front Ventures vs. Goodness Growth Holdings | 4Front Ventures vs. Rubicon Organics | 4Front Ventures vs. CLS Holdings USA | 4Front Ventures vs. MPX International Corp |
| CLS Holdings vs. Benchmark Botanics | CLS Holdings vs. Speakeasy Cannabis Club | CLS Holdings vs. City View Green | CLS Holdings vs. BC Craft Supply |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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