Correlation Between SNDL and KINDER

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

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

Diversification Opportunities for SNDL and KINDER

0.34

Correlation Coefficient

SNDL  KINDER

Weak diversification

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

Pair Corralation between SNDL and KINDER

Given the investment horizon of 90 days SNDL Inc is expected to under-perform the KINDER. In addition to that, SNDL is 1.4 times more volatile than KINDER MORGAN FIN. It trades about -0.09 of its total potential returns per unit of risk. KINDER MORGAN FIN is currently generating about -0.08 per unit of volatility. If you would invest  10,383  in KINDER MORGAN FIN on December 22, 2024 and sell it today you would lose (523.00) from holding KINDER MORGAN FIN or give up 5.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	50.82%
Values	Daily Returns

SNDL Inc  vs.  KINDER MORGAN FIN

SNDL Inc

Risk-Adjusted Performance

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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

KINDER MORGAN FIN

Risk-Adjusted Performance

Very Weak

Over the last 90 days KINDER MORGAN FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for KINDER MORGAN FIN investors.

Pair Trading with SNDL and KINDER

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

The idea behind SNDL Inc and KINDER MORGAN FIN 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.