Correlation Between TILT Holdings and Khiron Life

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

By analyzing existing cross correlation between TILT Holdings and Khiron Life Sciences, you can compare the effects of market volatilities on TILT Holdings and Khiron Life 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 Khiron Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of TILT Holdings and Khiron Life.

Diversification Opportunities for TILT Holdings and Khiron Life

-0.3

Correlation Coefficient

TILT Holdings  Khiron Life

Very good diversification

The 3 months correlation between TILT and Khiron is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding TILT Holdings and Khiron Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khiron Life Sciences 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 Khiron Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khiron Life Sciences has no effect on the direction of TILT Holdings i.e., TILT Holdings and Khiron Life go up and down completely randomly.

Pair Corralation between TILT Holdings and Khiron Life

If you would invest  0.80  in TILT Holdings on October 9, 2024 and sell it today you would lose (0.10) from holding TILT Holdings or give up 12.5% of portfolio value over 90 days.

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

TILT Holdings  vs.  Khiron Life Sciences

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Khiron Life Sciences

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Khiron Life Sciences are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Khiron Life reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TILT Holdings and Khiron Life

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

The idea behind TILT Holdings and Khiron Life Sciences 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.