Correlation Between SNDL and 674599DN2

Can any of the company-specific risk be diversified away by investing in both SNDL and 674599DN2 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 674599DN2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SNDL Inc and OXY 75 15 OCT 26, you can compare the effects of market volatilities on SNDL and 674599DN2 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 674599DN2. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and 674599DN2.

Diversification Opportunities for SNDL and 674599DN2

0.05

Correlation Coefficient

SNDL  674599DN2

Significant diversification

The 3 months correlation between SNDL and 674599DN2 is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and OXY 75 15 OCT 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OXY 75 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 674599DN2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OXY 75 15 has no effect on the direction of SNDL i.e., SNDL and 674599DN2 go up and down completely randomly.

Pair Corralation between SNDL and 674599DN2

Given the investment horizon of 90 days SNDL Inc is expected to under-perform the 674599DN2. In addition to that, SNDL is 3.49 times more volatile than OXY 75 15 OCT 26. It trades about -0.07 of its total potential returns per unit of risk. OXY 75 15 OCT 26 is currently generating about 0.04 per unit of volatility. If you would invest  10,676  in OXY 75 15 OCT 26 on September 14, 2024 and sell it today you would earn a total of  83.00  from holding OXY 75 15 OCT 26 or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	41.27%
Values	Daily Returns

SNDL Inc  vs.  OXY 75 15 OCT 26

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 unsteady performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

OXY 75 15

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OXY 75 15 OCT 26 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 674599DN2 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SNDL and 674599DN2

The main advantage of trading using opposite SNDL and 674599DN2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, 674599DN2 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 674599DN2 will offset losses from the drop in 674599DN2's long position.

The idea behind SNDL Inc and OXY 75 15 OCT 26 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.