Correlation Between PVH Corp and SNDL

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

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

Diversification Opportunities for PVH Corp and SNDL

-0.63

Correlation Coefficient

PVH Corp  SNDL

Excellent diversification

The 3 months correlation between PVH and SNDL is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PVH Corp and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and PVH Corp 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 PVH Corp 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 PVH Corp i.e., PVH Corp and SNDL go up and down completely randomly.

Pair Corralation between PVH Corp and SNDL

Considering the 90-day investment horizon PVH Corp is expected to under-perform the SNDL. But the stock apears to be less risky and, when comparing its historical volatility, PVH Corp is 1.87 times less risky than SNDL. The stock trades about -0.07 of its potential returns per unit of risk. The SNDL Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  189.00  in SNDL Inc on October 8, 2024 and sell it today you would earn a total of  2.00  from holding SNDL Inc or generate 1.06% return on investment over 90 days.

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

PVH Corp  vs.  SNDL Inc

PVH Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PVH Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, PVH Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 PVH Corp and SNDL

The main advantage of trading using opposite PVH Corp and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PVH Corp 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 PVH Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.