Correlation Between Tilray and Lifeist Wellness

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

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

Diversification Opportunities for Tilray and Lifeist Wellness

0.61

Correlation Coefficient

Tilray  Lifeist Wellness

Poor diversification

The 3 months correlation between Tilray and Lifeist is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tilray Inc and Lifeist Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeist Wellness 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 Lifeist Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeist Wellness has no effect on the direction of Tilray i.e., Tilray and Lifeist Wellness go up and down completely randomly.

Pair Corralation between Tilray and Lifeist Wellness

Assuming the 90 days trading horizon Tilray is expected to generate 3.84 times less return on investment than Lifeist Wellness. But when comparing it to its historical volatility, Tilray Inc is 2.64 times less risky than Lifeist Wellness. It trades about 0.13 of its potential returns per unit of risk. Lifeist Wellness is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Lifeist Wellness on April 24, 2025 and sell it today you would earn a total of  10.00  from holding Lifeist Wellness or generate 250.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Tilray Inc  vs.  Lifeist Wellness

Tilray Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tilray Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Tilray displayed solid returns over the last few months and may actually be approaching a breakup point.

Lifeist Wellness

Risk-Adjusted Performance

Good

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

Pair Trading with Tilray and Lifeist Wellness

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

The idea behind Tilray Inc and Lifeist Wellness 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .