Correlation Between SNDL and NESNVX

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

By analyzing existing cross correlation between SNDL Inc and NESNVX 1 15 SEP 27, you can compare the effects of market volatilities on SNDL and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and NESNVX.

Diversification Opportunities for SNDL and NESNVX

0.23

Correlation Coefficient

SNDL  NESNVX

Modest diversification

The 3 months correlation between SNDL and NESNVX is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and NESNVX 1 15 SEP 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 1 15 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 1 15 has no effect on the direction of SNDL i.e., SNDL and NESNVX go up and down completely randomly.

Pair Corralation between SNDL and NESNVX

Given the investment horizon of 90 days SNDL Inc is expected to generate 3.83 times more return on investment than NESNVX. However, SNDL is 3.83 times more volatile than NESNVX 1 15 SEP 27. It trades about -0.03 of its potential returns per unit of risk. NESNVX 1 15 SEP 27 is currently generating about -0.17 per unit of risk. If you would invest  201.00  in SNDL Inc on October 14, 2024 and sell it today you would lose (17.00) from holding SNDL Inc or give up 8.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	58.06%
Values	Daily Returns

SNDL Inc  vs.  NESNVX 1 15 SEP 27

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 quite persistent fundamental indicators, SNDL is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

NESNVX 1 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 1 15 SEP 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 NESNVX 1 15 SEP 27 investors.

Pair Trading with SNDL and NESNVX

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

The idea behind SNDL Inc and NESNVX 1 15 SEP 27 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.