Correlation Between Fevertree Drinks and SNDL

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

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

Diversification Opportunities for Fevertree Drinks and SNDL

0.0

Correlation Coefficient

Fevertree Drinks  SNDL

Pay attention - limited upside

The 3 months correlation between Fevertree and SNDL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks Plc and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and Fevertree Drinks 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 Fevertree Drinks Plc 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 Fevertree Drinks i.e., Fevertree Drinks and SNDL go up and down completely randomly.

Pair Corralation between Fevertree Drinks and SNDL

Assuming the 90 days horizon Fevertree Drinks Plc is expected to generate 1.42 times more return on investment than SNDL. However, Fevertree Drinks is 1.42 times more volatile than SNDL Inc. It trades about -0.01 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.1 per unit of risk. If you would invest  892.00  in Fevertree Drinks Plc on December 1, 2024 and sell it today you would lose (42.00) from holding Fevertree Drinks Plc or give up 4.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.33%
Values	Daily Returns

Fevertree Drinks Plc  vs.  SNDL Inc

Fevertree Drinks Plc

Risk-Adjusted Performance

Very Weak

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

SNDL Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days SNDL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Fevertree Drinks and SNDL

The main advantage of trading using opposite Fevertree Drinks and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fevertree Drinks 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 Fevertree Drinks Plc 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.