Correlation Between Tilray and Kali

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

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

Diversification Opportunities for Tilray and Kali

0.59

Correlation Coefficient

Tilray  Kali

Very weak diversification

The 3 months correlation between Tilray and Kali is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tilray Inc and Kali Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kali Inc and Tilray 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 Tilray Inc are associated (or correlated) with Kali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kali Inc has no effect on the direction of Tilray i.e., Tilray and Kali go up and down completely randomly.

Pair Corralation between Tilray and Kali

Given the investment horizon of 90 days Tilray Inc is expected to generate 0.38 times more return on investment than Kali. However, Tilray Inc is 2.6 times less risky than Kali. It trades about -0.17 of its potential returns per unit of risk. Kali Inc is currently generating about -0.13 per unit of risk. If you would invest  116.00  in Tilray Inc on December 18, 2024 and sell it today you would lose (52.00) from holding Tilray Inc or give up 44.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Tilray Inc  vs.  Kali Inc

Tilray Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tilray Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kali Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kali Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Tilray and Kali

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

The idea behind Tilray Inc and Kali Inc 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.