Correlation Between MPX International and CLS Holdings
Can any of the company-specific risk be diversified away by investing in both MPX International 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 MPX International and CLS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPX International Corp and CLS Holdings USA, you can compare the effects of market volatilities on MPX International 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 MPX International with a short position of CLS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPX International and CLS Holdings.
Diversification Opportunities for MPX International and CLS Holdings
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between MPX and CLS is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding MPX International 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 MPX International 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 MPX International 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 MPX International i.e., MPX International and CLS Holdings go up and down completely randomly.
Pair Corralation between MPX International and CLS Holdings
Assuming the 90 days horizon MPX International Corp is expected to generate 11.54 times more return on investment than CLS Holdings. However, MPX International is 11.54 times more volatile than CLS Holdings USA. It trades about 0.14 of its potential returns per unit of risk. CLS Holdings USA is currently generating about 0.04 per unit of risk. If you would invest 0.66 in MPX International Corp on September 4, 2024 and sell it today you would lose (0.64) from holding MPX International Corp or give up 96.97% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
MPX International Corp vs. CLS Holdings USA
Performance |
Timeline |
MPX International Corp |
CLS Holdings USA |
MPX International and CLS Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MPX International and CLS Holdings
The main advantage of trading using opposite MPX International and CLS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPX International 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.MPX International vs. Cann American Corp | MPX International vs. Speakeasy Cannabis Club | MPX International vs. Benchmark Botanics | MPX International vs. Link Reservations |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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