Correlation Between Tilray and Entourage Health
Can any of the company-specific risk be diversified away by investing in both Tilray and Entourage Health 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 Tilray and Entourage Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tilray Inc and Entourage Health Corp, you can compare the effects of market volatilities on Tilray and Entourage Health 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 Tilray with a short position of Entourage Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tilray and Entourage Health.
Diversification Opportunities for Tilray and Entourage Health
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tilray and Entourage is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tilray Inc and Entourage Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entourage Health Corp and Tilray 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 Tilray Inc are associated (or correlated) with Entourage Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entourage Health Corp has no effect on the direction of Tilray i.e., Tilray and Entourage Health go up and down completely randomly.
Pair Corralation between Tilray and Entourage Health
Assuming the 90 days trading horizon Tilray Inc is expected to under-perform the Entourage Health. But the stock apears to be less risky and, when comparing its historical volatility, Tilray Inc is 13.43 times less risky than Entourage Health. The stock trades about -0.24 of its potential returns per unit of risk. The Entourage Health Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Entourage Health Corp on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Entourage Health Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tilray Inc vs. Entourage Health Corp
Performance |
| Timeline |
| Tilray Inc |
| Entourage Health Corp |
Tilray and Entourage Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tilray and Entourage Health
The main advantage of trading using opposite Tilray and Entourage Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tilray position performs unexpectedly, Entourage Health 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 Entourage Health will offset losses from the drop in Entourage Health's long position.The idea behind Tilray Inc and Entourage Health Corp 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.| Entourage Health vs. Auxly Cannabis Group | Entourage Health vs. Lifeist Wellness | Entourage Health vs. Medipharm Labs Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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