Correlation Between TILT Holdings and Trulieve Cannabis

Can any of the company-specific risk be diversified away by investing in both TILT Holdings and Trulieve Cannabis 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 TILT Holdings and Trulieve Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TILT Holdings and Trulieve Cannabis Corp, you can compare the effects of market volatilities on TILT Holdings and Trulieve Cannabis 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 TILT Holdings with a short position of Trulieve Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of TILT Holdings and Trulieve Cannabis.

Diversification Opportunities for TILT Holdings and Trulieve Cannabis

0.3

Correlation Coefficient

TILT Holdings  Trulieve Cannabis

Weak diversification

The 3 months correlation between TILT and Trulieve is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding TILT Holdings and Trulieve Cannabis Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trulieve Cannabis Corp and TILT Holdings 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 TILT Holdings are associated (or correlated) with Trulieve Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trulieve Cannabis Corp has no effect on the direction of TILT Holdings i.e., TILT Holdings and Trulieve Cannabis go up and down completely randomly.

Pair Corralation between TILT Holdings and Trulieve Cannabis

Assuming the 90 days horizon TILT Holdings is expected to generate 2.5 times more return on investment than Trulieve Cannabis. However, TILT Holdings is 2.5 times more volatile than Trulieve Cannabis Corp. It trades about 0.17 of its potential returns per unit of risk. Trulieve Cannabis Corp is currently generating about 0.26 per unit of risk. If you would invest  0.51  in TILT Holdings on February 7, 2025 and sell it today you would earn a total of  0.20  from holding TILT Holdings or generate 39.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

TILT Holdings  vs.  Trulieve Cannabis Corp

TILT Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TILT Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TILT Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Trulieve Cannabis Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trulieve Cannabis Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Trulieve Cannabis is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TILT Holdings and Trulieve Cannabis

The main advantage of trading using opposite TILT Holdings and Trulieve Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TILT Holdings position performs unexpectedly, Trulieve Cannabis 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 Trulieve Cannabis will offset losses from the drop in Trulieve Cannabis' long position.

The idea behind TILT Holdings and Trulieve Cannabis 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.