Correlation Between KEYCORP and SNDL

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

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

Diversification Opportunities for KEYCORP and SNDL

0.52

Correlation Coefficient

KEYCORP  SNDL

Very weak diversification

The 3 months correlation between KEYCORP and SNDL is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding KEYCORP MTN and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and KEYCORP 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 KEYCORP MTN are associated (or correlated) with SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of KEYCORP i.e., KEYCORP and SNDL go up and down completely randomly.

Pair Corralation between KEYCORP and SNDL

Assuming the 90 days trading horizon KEYCORP MTN is expected to under-perform the SNDL. But the bond apears to be less risky and, when comparing its historical volatility, KEYCORP MTN is 1.43 times less risky than SNDL. The bond trades about -0.13 of its potential returns per unit of risk. The SNDL Inc is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  210.00  in SNDL Inc on September 19, 2024 and sell it today you would lose (40.00) from holding SNDL Inc or give up 19.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

KEYCORP MTN  vs.  SNDL Inc

KEYCORP MTN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEYCORP MTN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for KEYCORP MTN investors.

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.

Pair Trading with KEYCORP and SNDL

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

The idea behind KEYCORP MTN and SNDL Inc 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.