Correlation Between Shuttle Pharmaceuticals and CLS Holdings

Can any of the company-specific risk be diversified away by investing in both Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals and CLS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shuttle Pharmaceuticals and CLS Holdings USA, you can compare the effects of market volatilities on Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals with a short position of CLS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuttle Pharmaceuticals and CLS Holdings.

Diversification Opportunities for Shuttle Pharmaceuticals and CLS Holdings

0.55

Correlation Coefficient

Shuttle Pharmaceuticals  CLS Holdings

Very weak diversification

The 3 months correlation between Shuttle and CLS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals i.e., Shuttle Pharmaceuticals and CLS Holdings go up and down completely randomly.

Pair Corralation between Shuttle Pharmaceuticals and CLS Holdings

Given the investment horizon of 90 days Shuttle Pharmaceuticals is expected to generate 0.86 times more return on investment than CLS Holdings. However, Shuttle Pharmaceuticals is 1.17 times less risky than CLS Holdings. It trades about 0.16 of its potential returns per unit of risk. CLS Holdings USA is currently generating about -0.27 per unit of risk. If you would invest  80.00  in Shuttle Pharmaceuticals on October 26, 2024 and sell it today you would earn a total of  12.00  from holding Shuttle Pharmaceuticals or generate 15.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Shuttle Pharmaceuticals  vs.  CLS Holdings USA

Shuttle Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shuttle Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

CLS Holdings USA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CLS Holdings USA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Shuttle Pharmaceuticals and CLS Holdings

The main advantage of trading using opposite Shuttle Pharmaceuticals and CLS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuttle Pharmaceuticals 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.

The idea behind Shuttle Pharmaceuticals and CLS Holdings USA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.