Correlation Between Cronos and Tilray
Can any of the company-specific risk be diversified away by investing in both Cronos 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 Cronos and Tilray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cronos Group and Tilray Inc, you can compare the effects of market volatilities on Cronos 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 Cronos with a short position of Tilray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cronos and Tilray.
Diversification Opportunities for Cronos and Tilray
Very weak diversification
The 3 months correlation between Cronos and Tilray is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cronos Group and Tilray Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tilray Inc and Cronos 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 Cronos Group 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 Cronos i.e., Cronos and Tilray go up and down completely randomly.
Pair Corralation between Cronos and Tilray
Assuming the 90 days trading horizon Cronos Group is expected to generate 1.1 times more return on investment than Tilray. However, Cronos is 1.1 times more volatile than Tilray Inc. It trades about 0.01 of its potential returns per unit of risk. Tilray Inc is currently generating about -0.14 per unit of risk. If you would invest 299.00 in Cronos Group on August 30, 2024 and sell it today you would lose (5.00) from holding Cronos Group or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cronos Group vs. Tilray Inc
Performance |
| Timeline |
| Cronos Group |
| Tilray Inc |
Cronos and Tilray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cronos and Tilray
The main advantage of trading using opposite Cronos and Tilray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cronos 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.| Cronos vs. Decibel Cannabis | Cronos vs. Cannara Biotech | Cronos vs. iShares Canadian HYBrid | Cronos vs. Altagas Cum Red |
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 Stocks Directory module to find actively traded stocks across global markets.
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