Correlation Between TILT Holdings and Vext Science

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

By analyzing existing cross correlation between TILT Holdings and Vext Science, you can compare the effects of market volatilities on TILT Holdings and Vext Science 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 Vext Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of TILT Holdings and Vext Science.

Diversification Opportunities for TILT Holdings and Vext Science

0.54

Correlation Coefficient

TILT Holdings  Vext Science

Very weak diversification

The 3 months correlation between TILT and Vext is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding TILT Holdings and Vext Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vext Science 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 Vext Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vext Science has no effect on the direction of TILT Holdings i.e., TILT Holdings and Vext Science go up and down completely randomly.

Pair Corralation between TILT Holdings and Vext Science

Assuming the 90 days horizon TILT Holdings is expected to generate 3.6 times less return on investment than Vext Science. In addition to that, TILT Holdings is 1.38 times more volatile than Vext Science. It trades about 0.04 of its total potential returns per unit of risk. Vext Science is currently generating about 0.21 per unit of volatility. If you would invest  7.55  in Vext Science on May 11, 2025 and sell it today you would earn a total of  8.45  from holding Vext Science or generate 111.92% return on investment over 90 days.

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

TILT Holdings  vs.  Vext Science

TILT Holdings

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in TILT Holdings are ranked lower than 3 (%) 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.

Vext Science

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vext Science are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vext Science reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TILT Holdings and Vext Science

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

The idea behind TILT Holdings and Vext Science 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.