Correlation Between CapitaLand Investment and SNDL

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

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

Diversification Opportunities for CapitaLand Investment and SNDL

0.17

Correlation Coefficient

CapitaLand Investment  SNDL

Average diversification

The 3 months correlation between CapitaLand and SNDL is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and CapitaLand Investment 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 CapitaLand Investment Limited 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 CapitaLand Investment i.e., CapitaLand Investment and SNDL go up and down completely randomly.

Pair Corralation between CapitaLand Investment and SNDL

Assuming the 90 days horizon CapitaLand Investment is expected to generate 2.2 times less return on investment than SNDL. In addition to that, CapitaLand Investment is 1.13 times more volatile than SNDL Inc. It trades about 0.02 of its total potential returns per unit of risk. SNDL Inc is currently generating about 0.04 per unit of volatility. If you would invest  149.00  in SNDL Inc on October 10, 2024 and sell it today you would earn a total of  39.00  from holding SNDL Inc or generate 26.17% return on investment over 90 days.

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

CapitaLand Investment Limited  vs.  SNDL Inc

CapitaLand Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CapitaLand Investment Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SNDL Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SNDL Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 CapitaLand Investment and SNDL

The main advantage of trading using opposite CapitaLand Investment and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment 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 CapitaLand Investment Limited 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.