Correlation Between John Wiley and SNDL

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

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

Diversification Opportunities for John Wiley and SNDL

-0.01

Correlation Coefficient

John Wiley  SNDL

Good diversification

The 3 months correlation between John and SNDL is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding John Wiley Sons and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and John Wiley 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 John Wiley Sons 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 John Wiley i.e., John Wiley and SNDL go up and down completely randomly.

Pair Corralation between John Wiley and SNDL

Given the investment horizon of 90 days John Wiley Sons is expected to generate 21.05 times more return on investment than SNDL. However, John Wiley is 21.05 times more volatile than SNDL Inc. It trades about 0.08 of its potential returns per unit of risk. SNDL Inc is currently generating about 0.02 per unit of risk. If you would invest  3,846  in John Wiley Sons on September 14, 2024 and sell it today you would earn a total of  830.00  from holding John Wiley Sons or generate 21.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.57%
Values	Daily Returns

John Wiley Sons  vs.  SNDL Inc

John Wiley Sons

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Wiley Sons are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, John Wiley is not utilizing all of its potentials. The latest 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with John Wiley and SNDL

The main advantage of trading using opposite John Wiley and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Wiley 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 John Wiley Sons 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.