Correlation Between Teva Pharma and CLS Holdings
Can any of the company-specific risk be diversified away by investing in both Teva Pharma 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 Teva Pharma and CLS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teva Pharma Industries and CLS Holdings USA, you can compare the effects of market volatilities on Teva Pharma 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 Teva Pharma with a short position of CLS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teva Pharma and CLS Holdings.
Diversification Opportunities for Teva Pharma and CLS Holdings
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teva and CLS is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Teva Pharma Industries 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 Teva Pharma 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 Teva Pharma Industries 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 Teva Pharma i.e., Teva Pharma and CLS Holdings go up and down completely randomly.
Pair Corralation between Teva Pharma and CLS Holdings
Given the investment horizon of 90 days Teva Pharma is expected to generate 56.06 times less return on investment than CLS Holdings. But when comparing it to its historical volatility, Teva Pharma Industries is 6.19 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 5.21 in CLS Holdings USA on September 1, 2024 and sell it today you would lose (0.92) from holding CLS Holdings USA or give up 17.66% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.21% |
Values | Daily Returns |
Teva Pharma Industries vs. CLS Holdings USA
Performance |
Timeline |
Teva Pharma Industries |
CLS Holdings USA |
Teva Pharma and CLS Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Teva Pharma and CLS Holdings
The main advantage of trading using opposite Teva Pharma and CLS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teva Pharma 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.Teva Pharma vs. Crinetics Pharmaceuticals | Teva Pharma vs. Enanta Pharmaceuticals | Teva Pharma vs. Amicus Therapeutics | Teva Pharma vs. Connect Biopharma Holdings |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |