Correlation Between SL Green and SNDL

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

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

Diversification Opportunities for SL Green and SNDL

0.46

Correlation Coefficient

SL Green  SNDL

Very weak diversification

The 3 months correlation between SLG and SNDL is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and SL Green 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 SL Green Realty 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 SL Green i.e., SL Green and SNDL go up and down completely randomly.

Pair Corralation between SL Green and SNDL

Considering the 90-day investment horizon SL Green Realty is expected to generate 0.54 times more return on investment than SNDL. However, SL Green Realty is 1.84 times less risky than SNDL. It trades about 0.09 of its potential returns per unit of risk. SNDL Inc is currently generating about 0.05 per unit of risk. If you would invest  4,269  in SL Green Realty on October 7, 2024 and sell it today you would earn a total of  2,539  from holding SL Green Realty or generate 59.48% return on investment over 90 days.

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

SL Green Realty  vs.  SNDL Inc

SL Green Realty

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, SL Green is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 SL Green and SNDL

The main advantage of trading using opposite SL Green and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green 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 SL Green Realty 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.