Correlation Between Tilray and Canfor

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

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

Diversification Opportunities for Tilray and Canfor

-0.68

Correlation Coefficient

Tilray  Canfor

Excellent diversification

The 3 months correlation between Tilray and Canfor is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Tilray Inc and Canfor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor 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 Canfor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor has no effect on the direction of Tilray i.e., Tilray and Canfor go up and down completely randomly.

Pair Corralation between Tilray and Canfor

Assuming the 90 days trading horizon Tilray Inc is expected to generate 6.64 times more return on investment than Canfor. However, Tilray is 6.64 times more volatile than Canfor. It trades about 0.18 of its potential returns per unit of risk. Canfor is currently generating about -0.08 per unit of risk. If you would invest  79.00  in Tilray Inc on July 29, 2025 and sell it today you would earn a total of  129.00  from holding Tilray Inc or generate 163.29% return on investment over 90 days.

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

Tilray Inc  vs.  Canfor

Tilray Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tilray Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Tilray displayed solid returns over the last few months and may actually be approaching a breakup point.

Canfor

Risk-Adjusted Performance

Weakest

Over the last 90 days Canfor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Tilray and Canfor

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

The idea behind Tilray Inc and Canfor 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.