Correlation Between Chalice Brands and Trulieve Cannabis

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

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

Diversification Opportunities for Chalice Brands and Trulieve Cannabis

0.46

Correlation Coefficient

Chalice Brands  Trulieve Cannabis

Very weak diversification

The 3 months correlation between Chalice and Trulieve is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Brands 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 Chalice Brands 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 Chalice Brands 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 Chalice Brands i.e., Chalice Brands and Trulieve Cannabis go up and down completely randomly.

Pair Corralation between Chalice Brands and Trulieve Cannabis

Assuming the 90 days horizon Chalice Brands is expected to generate 10.0 times more return on investment than Trulieve Cannabis. However, Chalice Brands is 10.0 times more volatile than Trulieve Cannabis Corp. It trades about 0.04 of its potential returns per unit of risk. Trulieve Cannabis Corp is currently generating about 0.03 per unit of risk. If you would invest  1.00  in Chalice Brands on October 8, 2024 and sell it today you would lose (1.00) from holding Chalice Brands or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.65%
Values	Daily Returns

Chalice Brands  vs.  Trulieve Cannabis Corp

Chalice Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chalice Brands 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 essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Trulieve Cannabis Corp

Risk-Adjusted Performance

0 of 100

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Chalice Brands and Trulieve Cannabis

The main advantage of trading using opposite Chalice Brands and Trulieve Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chalice Brands 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 Chalice Brands 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..