Correlation Between Green Cures and CLS Holdings
Can any of the company-specific risk be diversified away by investing in both Green Cures 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 Green Cures and CLS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cures Botanical and CLS Holdings USA, you can compare the effects of market volatilities on Green Cures 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 Green Cures with a short position of CLS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cures and CLS Holdings.
Diversification Opportunities for Green Cures and CLS Holdings
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Green and CLS is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Green Cures Botanical 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 Green Cures 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 Green Cures Botanical 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 Green Cures i.e., Green Cures and CLS Holdings go up and down completely randomly.
Pair Corralation between Green Cures and CLS Holdings
Given the investment horizon of 90 days Green Cures Botanical is expected to generate 4.0 times more return on investment than CLS Holdings. However, Green Cures is 4.0 times more volatile than CLS Holdings USA. It trades about 0.19 of its potential returns per unit of risk. CLS Holdings USA is currently generating about 0.05 per unit of risk. If you would invest 0.02 in Green Cures Botanical on August 29, 2024 and sell it today you would lose (0.01) from holding Green Cures Botanical or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cures Botanical vs. CLS Holdings USA
Performance |
| Timeline |
| Green Cures Botanical |
| CLS Holdings USA |
Green Cures and CLS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cures and CLS Holdings
The main advantage of trading using opposite Green Cures and CLS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cures 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.| Green Cures vs. Cann American Corp | Green Cures vs. Rimrock Gold Corp | Green Cures vs. Galexxy Holdings | Green Cures vs. Indoor Harvest 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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