Correlation Between 50249AAH6 and SNDL

Can any of the company-specific risk be diversified away by investing in both 50249AAH6 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 50249AAH6 and SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LYB INTERNATIONAL FINANCE and SNDL Inc, you can compare the effects of market volatilities on 50249AAH6 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 50249AAH6 with a short position of SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of 50249AAH6 and SNDL.

Diversification Opportunities for 50249AAH6 and SNDL

0.0

Correlation Coefficient

50249AAH6  SNDL

Pay attention - limited upside

The 3 months correlation between 50249AAH6 and SNDL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LYB INTERNATIONAL FINANCE and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and 50249AAH6 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 LYB INTERNATIONAL FINANCE 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 50249AAH6 i.e., 50249AAH6 and SNDL go up and down completely randomly.

Pair Corralation between 50249AAH6 and SNDL

Assuming the 90 days trading horizon LYB INTERNATIONAL FINANCE is expected to generate 0.22 times more return on investment than SNDL. However, LYB INTERNATIONAL FINANCE is 4.5 times less risky than SNDL. It trades about -0.11 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.09 per unit of risk. If you would invest  7,605  in LYB INTERNATIONAL FINANCE on October 24, 2024 and sell it today you would lose (307.00) from holding LYB INTERNATIONAL FINANCE or give up 4.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	88.33%
Values	Daily Returns

LYB INTERNATIONAL FINANCE  vs.  SNDL Inc

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

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Very Weak

Over the last 90 days LYB INTERNATIONAL FINANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 50249AAH6 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with 50249AAH6 and SNDL

The main advantage of trading using opposite 50249AAH6 and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 50249AAH6 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 LYB INTERNATIONAL FINANCE 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.