Correlation Between Trulieve Cannabis and Curaleaf Holdings
Can any of the company-specific risk be diversified away by investing in both Trulieve Cannabis and Curaleaf 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 Trulieve Cannabis and Curaleaf Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trulieve Cannabis Corp and Curaleaf Holdings, you can compare the effects of market volatilities on Trulieve Cannabis and Curaleaf 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 Trulieve Cannabis with a short position of Curaleaf Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trulieve Cannabis and Curaleaf Holdings.
Diversification Opportunities for Trulieve Cannabis and Curaleaf Holdings
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Trulieve and Curaleaf is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Trulieve Cannabis Corp and Curaleaf Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curaleaf Holdings and Trulieve Cannabis 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 Trulieve Cannabis Corp are associated (or correlated) with Curaleaf Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curaleaf Holdings has no effect on the direction of Trulieve Cannabis i.e., Trulieve Cannabis and Curaleaf Holdings go up and down completely randomly.
Pair Corralation between Trulieve Cannabis and Curaleaf Holdings
Assuming the 90 days horizon Trulieve Cannabis Corp is expected to under-perform the Curaleaf Holdings. In addition to that, Trulieve Cannabis is 1.1 times more volatile than Curaleaf Holdings. It trades about -0.25 of its total potential returns per unit of risk. Curaleaf Holdings is currently generating about -0.16 per unit of volatility. If you would invest 341.00 in Curaleaf Holdings on August 24, 2024 and sell it today you would lose (131.00) from holding Curaleaf Holdings or give up 38.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trulieve Cannabis Corp vs. Curaleaf Holdings
Performance |
| Timeline |
| Trulieve Cannabis Corp |
| Curaleaf Holdings |
Trulieve Cannabis and Curaleaf Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trulieve Cannabis and Curaleaf Holdings
The main advantage of trading using opposite Trulieve Cannabis and Curaleaf Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trulieve Cannabis position performs unexpectedly, Curaleaf 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 Curaleaf Holdings will offset losses from the drop in Curaleaf Holdings' long position.| Trulieve Cannabis vs. Rezolute | Trulieve Cannabis vs. Tempest Therapeutics | Trulieve Cannabis vs. Forte Biosciences | Trulieve Cannabis vs. Dyadic International |
| Curaleaf Holdings vs. Green Cures Botanical | Curaleaf Holdings vs. Cann American Corp | Curaleaf Holdings vs. Rimrock Gold Corp | Curaleaf Holdings vs. Galexxy 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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