Correlation Between SNDL and Binah Capital

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

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

Diversification Opportunities for SNDL and Binah Capital

-0.28

Correlation Coefficient

SNDL  Binah Capital

Very good diversification

The 3 months correlation between SNDL and Binah is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Binah Capital Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binah Capital Group, and SNDL 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 SNDL Inc are associated (or correlated) with Binah Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binah Capital Group, has no effect on the direction of SNDL i.e., SNDL and Binah Capital go up and down completely randomly.

Pair Corralation between SNDL and Binah Capital

Given the investment horizon of 90 days SNDL is expected to generate 84.63 times less return on investment than Binah Capital. But when comparing it to its historical volatility, SNDL Inc is 21.28 times less risky than Binah Capital. It trades about 0.03 of its potential returns per unit of risk. Binah Capital Group, is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Binah Capital Group, on September 19, 2024 and sell it today you would lose (4.50) from holding Binah Capital Group, or give up 45.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	58.06%
Values	Daily Returns

SNDL Inc  vs.  Binah Capital Group,

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 unsteady performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Binah Capital Group,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Binah Capital Group, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Binah Capital showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SNDL and Binah Capital

The main advantage of trading using opposite SNDL and Binah Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Binah Capital 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 Binah Capital will offset losses from the drop in Binah Capital's long position.

The idea behind SNDL Inc and Binah Capital Group, 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.