Correlation Between SNDL and WarpSpeed Taxi

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

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

Diversification Opportunities for SNDL and WarpSpeed Taxi

0.26

Correlation Coefficient

SNDL  WarpSpeed Taxi

Modest diversification

The 3 months correlation between SNDL and WarpSpeed is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and WarpSpeed Taxi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WarpSpeed Taxi 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 WarpSpeed Taxi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WarpSpeed Taxi has no effect on the direction of SNDL i.e., SNDL and WarpSpeed Taxi go up and down completely randomly.

Pair Corralation between SNDL and WarpSpeed Taxi

Given the investment horizon of 90 days SNDL Inc is expected to generate 0.08 times more return on investment than WarpSpeed Taxi. However, SNDL Inc is 11.89 times less risky than WarpSpeed Taxi. It trades about -0.33 of its potential returns per unit of risk. WarpSpeed Taxi is currently generating about -0.16 per unit of risk. If you would invest  195.00  in SNDL Inc on September 15, 2024 and sell it today you would lose (17.00) from holding SNDL Inc or give up 8.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SNDL Inc  vs.  WarpSpeed Taxi

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.

WarpSpeed Taxi

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WarpSpeed Taxi are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, WarpSpeed Taxi unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SNDL and WarpSpeed Taxi

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

The idea behind SNDL Inc and WarpSpeed Taxi 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.