Correlation Between MERCK Kommanditgesells and CLS Holdings
Can any of the company-specific risk be diversified away by investing in both MERCK Kommanditgesells 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 MERCK Kommanditgesells and CLS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MERCK Kommanditgesellschaft auf and CLS Holdings USA, you can compare the effects of market volatilities on MERCK Kommanditgesells 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 MERCK Kommanditgesells with a short position of CLS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MERCK Kommanditgesells and CLS Holdings.
Diversification Opportunities for MERCK Kommanditgesells and CLS Holdings
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MERCK and CLS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding MERCK Kommanditgesellschaft au 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 MERCK Kommanditgesells 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 MERCK Kommanditgesellschaft auf 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 MERCK Kommanditgesells i.e., MERCK Kommanditgesells and CLS Holdings go up and down completely randomly.
Pair Corralation between MERCK Kommanditgesells and CLS Holdings
Assuming the 90 days horizon MERCK Kommanditgesellschaft auf is expected to under-perform the CLS Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, MERCK Kommanditgesellschaft auf is 7.53 times less risky than CLS Holdings. The pink sheet trades about -0.29 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 | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
MERCK Kommanditgesellschaft au vs. CLS Holdings USA
Performance |
| Timeline |
| MERCK Kommanditgesells |
| CLS Holdings USA |
MERCK Kommanditgesells and CLS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MERCK Kommanditgesells and CLS Holdings
The main advantage of trading using opposite MERCK Kommanditgesells and CLS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MERCK Kommanditgesells 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.| MERCK Kommanditgesells vs. Greater Cannabis | MERCK Kommanditgesells vs. Merck KGaA ADR | MERCK Kommanditgesells vs. For The Earth | MERCK Kommanditgesells vs. Indo Global Exchange |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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