Correlation Between Alaska Energy and Tilray
Can any of the company-specific risk be diversified away by investing in both Alaska Energy and Tilray 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 Alaska Energy and Tilray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alaska Energy Metals and Tilray Inc, you can compare the effects of market volatilities on Alaska Energy and Tilray 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 Alaska Energy with a short position of Tilray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Energy and Tilray.
Diversification Opportunities for Alaska Energy and Tilray
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alaska and Tilray is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Energy Metals and Tilray Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tilray Inc and Alaska Energy 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 Alaska Energy Metals are associated (or correlated) with Tilray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tilray Inc has no effect on the direction of Alaska Energy i.e., Alaska Energy and Tilray go up and down completely randomly.
Pair Corralation between Alaska Energy and Tilray
Assuming the 90 days trading horizon Alaska Energy Metals is expected to under-perform the Tilray. In addition to that, Alaska Energy is 1.47 times more volatile than Tilray Inc. It trades about -0.03 of its total potential returns per unit of risk. Tilray Inc is currently generating about 0.01 per unit of volatility. If you would invest 216.00 in Tilray Inc on September 12, 2024 and sell it today you would lose (35.00) from holding Tilray Inc or give up 16.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Energy Metals vs. Tilray Inc
Performance |
| Timeline |
| Alaska Energy Metals |
| Tilray Inc |
Alaska Energy and Tilray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Energy and Tilray
The main advantage of trading using opposite Alaska Energy and Tilray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Energy position performs unexpectedly, Tilray 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 Tilray will offset losses from the drop in Tilray's long position.| Alaska Energy vs. Datable Technology Corp | Alaska Energy vs. NeXGold Mining Corp | Alaska Energy vs. Renoworks Software | Alaska Energy vs. HPQ Silicon Resources |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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