Correlation Between SNDL and Joint Stock

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

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

Diversification Opportunities for SNDL and Joint Stock

0.34

Correlation Coefficient

SNDL  Joint Stock

Weak diversification

The 3 months correlation between SNDL and Joint is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Joint Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Stock 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 Joint Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Stock has no effect on the direction of SNDL i.e., SNDL and Joint Stock go up and down completely randomly.

Pair Corralation between SNDL and Joint Stock

Given the investment horizon of 90 days SNDL Inc is expected to generate 1.12 times more return on investment than Joint Stock. However, SNDL is 1.12 times more volatile than Joint Stock. It trades about 0.0 of its potential returns per unit of risk. Joint Stock is currently generating about -0.07 per unit of risk. If you would invest  191.00  in SNDL Inc on September 24, 2024 and sell it today you would lose (11.00) from holding SNDL Inc or give up 5.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

SNDL Inc  vs.  Joint Stock

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.

Joint Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Joint Stock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Joint Stock is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SNDL and Joint Stock

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

The idea behind SNDL Inc and Joint Stock 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 Valuation module to check real value of public entities based on technical and fundamental data.