Correlation Between Aleafia Health and TILT Holdings

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

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

Diversification Opportunities for Aleafia Health and TILT Holdings

-0.29

Correlation Coefficient

Aleafia Health  TILT Holdings

Very good diversification

The 3 months correlation between Aleafia and TILT is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aleafia Health and TILT Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TILT Holdings and Aleafia Health 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 Aleafia Health are associated (or correlated) with TILT Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TILT Holdings has no effect on the direction of Aleafia Health i.e., Aleafia Health and TILT Holdings go up and down completely randomly.

Pair Corralation between Aleafia Health and TILT Holdings

If you would invest  1.51  in Aleafia Health on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Aleafia Health or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Aleafia Health  vs.  TILT Holdings

Aleafia Health

Risk-Adjusted Performance

0 of 100

Very Weak

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

TILT Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TILT Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Aleafia Health and TILT Holdings

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

The idea behind Aleafia Health and TILT Holdings 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.