Correlation Between TILT Holdings and Verano Holdings

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

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

Diversification Opportunities for TILT Holdings and Verano Holdings

0.78

Correlation Coefficient

TILT Holdings  Verano Holdings

Poor diversification

The 3 months correlation between TILT and Verano is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding TILT Holdings and Verano Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verano Holdings 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 Verano Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verano Holdings Corp has no effect on the direction of TILT Holdings i.e., TILT Holdings and Verano Holdings go up and down completely randomly.

Pair Corralation between TILT Holdings and Verano Holdings

Assuming the 90 days horizon TILT Holdings is expected to generate 1.42 times more return on investment than Verano Holdings. However, TILT Holdings is 1.42 times more volatile than Verano Holdings Corp. It trades about -0.08 of its potential returns per unit of risk. Verano Holdings Corp is currently generating about -0.16 per unit of risk. If you would invest  1.30  in TILT Holdings on September 4, 2024 and sell it today you would lose (0.70) from holding TILT Holdings or give up 53.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

TILT Holdings  vs.  Verano Holdings Corp

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 weak 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.

Verano Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Verano Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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 TILT Holdings and Verano Holdings

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

The idea behind TILT Holdings and Verano Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.