Correlation Between City View and TILT Holdings

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

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

Diversification Opportunities for City View and TILT Holdings

-0.31

Correlation Coefficient

City View  TILT Holdings

Very good diversification

The 3 months correlation between City and TILT is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding City View Green and TILT Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TILT Holdings and City View 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 City View Green 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 City View i.e., City View and TILT Holdings go up and down completely randomly.

Pair Corralation between City View and TILT Holdings

Assuming the 90 days horizon City View Green is expected to generate 1.8 times more return on investment than TILT Holdings. However, City View is 1.8 times more volatile than TILT Holdings. It trades about 0.06 of its potential returns per unit of risk. TILT Holdings is currently generating about 0.0 per unit of risk. If you would invest  0.40  in City View Green on October 10, 2024 and sell it today you would lose (0.07) from holding City View Green or give up 17.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

City View Green  vs.  TILT Holdings

City View Green

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in City View Green are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, City View reported solid returns over the last few months and may actually be approaching a breakup point.

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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with City View and TILT Holdings

The main advantage of trading using opposite City View and TILT Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City View 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 City View Green 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.