Correlation Between SNDL and Hf Foods

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

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

Diversification Opportunities for SNDL and Hf Foods

-0.36

Correlation Coefficient

SNDL  Hf Foods

Very good diversification

The 3 months correlation between SNDL and HFFG is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Hf Foods Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hf Foods 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 Hf Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hf Foods Group has no effect on the direction of SNDL i.e., SNDL and Hf Foods go up and down completely randomly.

Pair Corralation between SNDL and Hf Foods

Given the investment horizon of 90 days SNDL Inc is expected to under-perform the Hf Foods. But the stock apears to be less risky and, when comparing its historical volatility, SNDL Inc is 1.41 times less risky than Hf Foods. The stock trades about 0.0 of its potential returns per unit of risk. The Hf Foods Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  321.00  in Hf Foods Group on September 24, 2024 and sell it today you would earn a total of  25.00  from holding Hf Foods Group or generate 7.79% return on investment over 90 days.

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

SNDL Inc  vs.  Hf Foods 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 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.

Hf Foods Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hf Foods Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Hf Foods may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SNDL and Hf Foods

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

The idea behind SNDL Inc and Hf Foods 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.