Correlation Between Sohm and Tilray
Can any of the company-specific risk be diversified away by investing in both Sohm 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 Sohm and Tilray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sohm Inc and Tilray Inc, you can compare the effects of market volatilities on Sohm 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 Sohm with a short position of Tilray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sohm and Tilray.
Diversification Opportunities for Sohm and Tilray
Very weak diversification
The 3 months correlation between Sohm and Tilray is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sohm Inc and Tilray Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tilray Inc and Sohm 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 Sohm 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 Sohm i.e., Sohm and Tilray go up and down completely randomly.
Pair Corralation between Sohm and Tilray
Given the investment horizon of 90 days Sohm Inc is expected to under-perform the Tilray. In addition to that, Sohm is 1.58 times more volatile than Tilray Inc. It trades about -0.09 of its total potential returns per unit of risk. Tilray Inc is currently generating about -0.02 per unit of volatility. If you would invest 468.00 in Tilray Inc on August 26, 2024 and sell it today you would lose (334.00) from holding Tilray Inc or give up 71.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 9.26% |
| Values | Daily Returns |
Sohm Inc vs. Tilray Inc
Performance |
| Timeline |
| Sohm Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tilray Inc |
Sohm and Tilray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sohm and Tilray
The main advantage of trading using opposite Sohm and Tilray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sohm 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.The idea behind Sohm Inc and Tilray Inc 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.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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |