Correlation Between Solarmax Technology and SNDL

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

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

Diversification Opportunities for Solarmax Technology and SNDL

0.65

Correlation Coefficient

Solarmax Technology  SNDL

Poor diversification

The 3 months correlation between Solarmax and SNDL is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Solarmax Technology Common and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and Solarmax Technology 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 Solarmax Technology Common 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 Solarmax Technology i.e., Solarmax Technology and SNDL go up and down completely randomly.

Pair Corralation between Solarmax Technology and SNDL

Given the investment horizon of 90 days Solarmax Technology Common is expected to generate 2.67 times more return on investment than SNDL. However, Solarmax Technology is 2.67 times more volatile than SNDL Inc. It trades about 0.02 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.03 per unit of risk. If you would invest  120.00  in Solarmax Technology Common on December 19, 2024 and sell it today you would lose (6.00) from holding Solarmax Technology Common or give up 5.0% of portfolio value over 90 days.

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

Solarmax Technology Common  vs.  SNDL Inc

Solarmax Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Solarmax Technology Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Solarmax Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 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 Solarmax Technology and SNDL

The main advantage of trading using opposite Solarmax Technology and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solarmax Technology 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 Solarmax Technology Common 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.