Correlation Between SNDL and Sligro Food

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

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

Diversification Opportunities for SNDL and Sligro Food

0.62

Correlation Coefficient

SNDL  Sligro Food

Poor diversification

The 3 months correlation between SNDL and Sligro is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of SNDL i.e., SNDL and Sligro Food go up and down completely randomly.

Pair Corralation between SNDL and Sligro Food

Given the investment horizon of 90 days SNDL Inc is expected to generate 3.18 times more return on investment than Sligro Food. However, SNDL is 3.18 times more volatile than Sligro Food Group. It trades about 0.01 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.05 per unit of risk. If you would invest  207.00  in SNDL Inc on September 21, 2024 and sell it today you would lose (34.00) from holding SNDL Inc or give up 16.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.3%
Values	Daily Returns

SNDL Inc  vs.  Sligro Food 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.

Sligro Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SNDL and Sligro Food

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

The idea behind SNDL Inc and Sligro Food 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.