Correlation Between BellRock Brands and TILT Holdings

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

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

Diversification Opportunities for BellRock Brands and TILT Holdings

0.0

Correlation Coefficient

BellRock Brands  TILT Holdings

Pay attention - limited upside

The 3 months correlation between BellRock and TILT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BellRock Brands and TILT Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TILT Holdings and BellRock 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 BellRock Brands 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 BellRock Brands i.e., BellRock Brands and TILT Holdings go up and down completely randomly.

Pair Corralation between BellRock Brands and TILT Holdings

Assuming the 90 days horizon BellRock Brands is expected to under-perform the TILT Holdings. In addition to that, BellRock Brands is 1.11 times more volatile than TILT Holdings. It trades about -0.13 of its total potential returns per unit of risk. TILT Holdings is currently generating about -0.09 per unit of volatility. If you would invest  1.50  in TILT Holdings on September 14, 2024 and sell it today you would lose (1.00) from holding TILT Holdings or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BellRock Brands  vs.  TILT Holdings

BellRock Brands

Risk-Adjusted Performance

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Very Weak

Over the last 90 days BellRock Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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.

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 BellRock Brands and TILT Holdings

The main advantage of trading using opposite BellRock Brands and TILT Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BellRock Brands 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 BellRock Brands 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.