Correlation Between Tilray and OrganiGram Holdings

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

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

Diversification Opportunities for Tilray and OrganiGram Holdings

0.41

Correlation Coefficient

Tilray  OrganiGram Holdings

Very weak diversification

The 3 months correlation between Tilray and OrganiGram is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tilray Inc and OrganiGram Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OrganiGram Holdings 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 OrganiGram Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OrganiGram Holdings has no effect on the direction of Tilray i.e., Tilray and OrganiGram Holdings go up and down completely randomly.

Pair Corralation between Tilray and OrganiGram Holdings

Assuming the 90 days trading horizon Tilray Inc is expected to generate 2.11 times more return on investment than OrganiGram Holdings. However, Tilray is 2.11 times more volatile than OrganiGram Holdings. It trades about 0.17 of its potential returns per unit of risk. OrganiGram Holdings is currently generating about 0.19 per unit of risk. If you would invest  61.00  in Tilray Inc on April 23, 2025 and sell it today you would earn a total of  45.00  from holding Tilray Inc or generate 73.77% return on investment over 90 days.

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

Tilray Inc  vs.  OrganiGram Holdings

Tilray Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tilray Inc are ranked lower than 13 (%) 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.

OrganiGram Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OrganiGram Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, OrganiGram Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tilray and OrganiGram Holdings

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

The idea behind Tilray Inc and OrganiGram 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.