Correlation Between Hemp and Tilray
Can any of the company-specific risk be diversified away by investing in both Hemp 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 Hemp and Tilray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemp Inc and Tilray Inc, you can compare the effects of market volatilities on Hemp 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 Hemp with a short position of Tilray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemp and Tilray.
Diversification Opportunities for Hemp and Tilray
Pay attention - limited upside
The 3 months correlation between Hemp and Tilray is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hemp Inc and Tilray Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tilray Inc and Hemp 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 Hemp Inc 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 Hemp i.e., Hemp and Tilray go up and down completely randomly.
Pair Corralation between Hemp and Tilray
Given the investment horizon of 90 days Hemp Inc is expected to generate 13.48 times more return on investment than Tilray. However, Hemp is 13.48 times more volatile than Tilray Inc. It trades about 0.07 of its potential returns per unit of risk. Tilray Inc is currently generating about 0.0 per unit of risk. If you would invest 0.01 in Hemp Inc on September 4, 2024 and sell it today you would lose (0.01) from holding Hemp Inc or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hemp Inc vs. Tilray Inc
Performance |
| Timeline |
| Hemp Inc |
| Tilray Inc |
Hemp and Tilray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemp and Tilray
The main advantage of trading using opposite Hemp and Tilray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemp 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.| Hemp vs. Cann American Corp | Hemp vs. Speakeasy Cannabis Club | Hemp vs. Benchmark Botanics | Hemp vs. Link Reservations |
| Tilray vs. Crinetics Pharmaceuticals | Tilray vs. Enanta Pharmaceuticals | Tilray vs. Amicus Therapeutics | Tilray vs. Connect Biopharma Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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