Correlation Between SNDL and 06051GJM2

Can any of the company-specific risk be diversified away by investing in both SNDL and 06051GJM2 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 06051GJM2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SNDL Inc and BANK OF AMERICA, you can compare the effects of market volatilities on SNDL and 06051GJM2 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 06051GJM2. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and 06051GJM2.

Diversification Opportunities for SNDL and 06051GJM2

0.0

Correlation Coefficient

SNDL  06051GJM2

Pay attention - limited upside

The 3 months correlation between SNDL and 06051GJM2 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and BANK OF AMERICA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK OF AMERICA 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 06051GJM2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK OF AMERICA has no effect on the direction of SNDL i.e., SNDL and 06051GJM2 go up and down completely randomly.

Pair Corralation between SNDL and 06051GJM2

Given the investment horizon of 90 days SNDL Inc is expected to generate 3.48 times more return on investment than 06051GJM2. However, SNDL is 3.48 times more volatile than BANK OF AMERICA. It trades about -0.01 of its potential returns per unit of risk. BANK OF AMERICA is currently generating about -0.17 per unit of risk. If you would invest  200.00  in SNDL Inc on September 5, 2024 and sell it today you would lose (9.00) from holding SNDL Inc or give up 4.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.63%
Values	Daily Returns

SNDL Inc  vs.  BANK OF AMERICA

SNDL Inc

Risk-Adjusted Performance

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Very Weak

Over the last 90 days SNDL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, SNDL is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

BANK OF AMERICA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK OF AMERICA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for BANK OF AMERICA investors.

Pair Trading with SNDL and 06051GJM2

The main advantage of trading using opposite SNDL and 06051GJM2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, 06051GJM2 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 06051GJM2 will offset losses from the drop in 06051GJM2's long position.

The idea behind SNDL Inc and BANK OF AMERICA 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..