Correlation Between Pinterest and SNDL

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

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

Diversification Opportunities for Pinterest and SNDL

0.42

Correlation Coefficient

Pinterest  SNDL

Very weak diversification

The 3 months correlation between Pinterest and SNDL is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and Pinterest 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 Pinterest 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 Pinterest i.e., Pinterest and SNDL go up and down completely randomly.

Pair Corralation between Pinterest and SNDL

Given the investment horizon of 90 days Pinterest is expected to under-perform the SNDL. But the stock apears to be less risky and, when comparing its historical volatility, Pinterest is 1.18 times less risky than SNDL. The stock trades about -0.1 of its potential returns per unit of risk. The SNDL Inc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  192.00  in SNDL Inc on September 28, 2024 and sell it today you would lose (13.00) from holding SNDL Inc or give up 6.77% of portfolio value over 90 days.

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

Pinterest  vs.  SNDL Inc

Pinterest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pinterest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private 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 latest unsteady performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Pinterest and SNDL

The main advantage of trading using opposite Pinterest and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest 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 Pinterest 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.