Correlation Between ANZ Group and SNDL

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

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

Diversification Opportunities for ANZ Group and SNDL

-0.16

Correlation Coefficient

ANZ Group  SNDL

Good diversification

The 3 months correlation between ANZ and SNDL is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and ANZ Group 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 ANZ Group Holdings are associated (or correlated) with SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of ANZ Group i.e., ANZ Group and SNDL go up and down completely randomly.

Pair Corralation between ANZ Group and SNDL

Assuming the 90 days horizon ANZ Group Holdings is expected to generate 0.25 times more return on investment than SNDL. However, ANZ Group Holdings is 3.94 times less risky than SNDL. It trades about 0.14 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.12 per unit of risk. If you would invest  1,991  in ANZ Group Holdings on September 5, 2024 and sell it today you would earn a total of  57.00  from holding ANZ Group Holdings or generate 2.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

ANZ Group Holdings  vs.  SNDL Inc

ANZ Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZ Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, ANZ Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SNDL Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SNDL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, SNDL is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with ANZ Group and SNDL

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

The idea behind ANZ Group Holdings and SNDL 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 Transaction History module to view history of all your transactions and understand their impact on performance.