Correlation Between SNDL and Doubledown Interactive

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

By analyzing existing cross correlation between SNDL Inc and Doubledown Interactive Co, you can compare the effects of market volatilities on SNDL and Doubledown Interactive 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 Doubledown Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Doubledown Interactive.

Diversification Opportunities for SNDL and Doubledown Interactive

0.67

Correlation Coefficient

SNDL  Doubledown Interactive

Poor diversification

The 3 months correlation between SNDL and Doubledown is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Doubledown Interactive Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubledown Interactive 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 Doubledown Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubledown Interactive has no effect on the direction of SNDL i.e., SNDL and Doubledown Interactive go up and down completely randomly.

Pair Corralation between SNDL and Doubledown Interactive

Given the investment horizon of 90 days SNDL is expected to generate 2.75 times less return on investment than Doubledown Interactive. In addition to that, SNDL is 1.08 times more volatile than Doubledown Interactive Co. It trades about 0.01 of its total potential returns per unit of risk. Doubledown Interactive Co is currently generating about 0.02 per unit of volatility. If you would invest  962.00  in Doubledown Interactive Co on October 3, 2024 and sell it today you would earn a total of  82.00  from holding Doubledown Interactive Co or generate 8.52% return on investment over 90 days.

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

SNDL Inc  vs.  Doubledown Interactive Co

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 latest unsteady performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Doubledown Interactive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubledown Interactive Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with SNDL and Doubledown Interactive

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

The idea behind SNDL Inc and Doubledown Interactive Co 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 Stocks Directory module to find actively traded stocks across global markets.