Correlation Between Khiron Life and Trulieve Cannabis

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

By analyzing existing cross correlation between Khiron Life Sciences and Trulieve Cannabis Corp, you can compare the effects of market volatilities on Khiron Life and Trulieve Cannabis 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 Khiron Life with a short position of Trulieve Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khiron Life and Trulieve Cannabis.

Diversification Opportunities for Khiron Life and Trulieve Cannabis

0.0

Correlation Coefficient

Khiron Life  Trulieve Cannabis

Pay attention - limited upside

The 3 months correlation between Khiron and Trulieve is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Khiron Life Sciences and Trulieve Cannabis Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trulieve Cannabis Corp and Khiron Life 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 Khiron Life Sciences are associated (or correlated) with Trulieve Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trulieve Cannabis Corp has no effect on the direction of Khiron Life i.e., Khiron Life and Trulieve Cannabis go up and down completely randomly.

Pair Corralation between Khiron Life and Trulieve Cannabis

If you would invest  1,057  in Trulieve Cannabis Corp on February 26, 2024 and sell it today you would lose (8.00) from holding Trulieve Cannabis Corp or give up 0.76% of portfolio value over 90 days.

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

Khiron Life Sciences  vs.  Trulieve Cannabis Corp

Khiron Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Khiron Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Khiron Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Trulieve Cannabis Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trulieve Cannabis Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Trulieve Cannabis reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Khiron Life and Trulieve Cannabis

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

The idea behind Khiron Life Sciences and Trulieve Cannabis Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.