Correlation Between Analog Devices and SNDL
Can any of the company-specific risk be diversified away by investing in both Analog Devices 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 Analog Devices and SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and SNDL Inc, you can compare the effects of market volatilities on Analog Devices 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 Analog Devices with a short position of SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and SNDL.
Diversification Opportunities for Analog Devices and SNDL
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Analog and SNDL is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and Analog Devices 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 Analog Devices 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 Analog Devices i.e., Analog Devices and SNDL go up and down completely randomly.
Pair Corralation between Analog Devices and SNDL
Considering the 90-day investment horizon Analog Devices is expected to generate 7.09 times less return on investment than SNDL. But when comparing it to its historical volatility, Analog Devices is 1.69 times less risky than SNDL. It trades about 0.0 of its potential returns per unit of risk. SNDL Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 197.00 in SNDL Inc on August 31, 2024 and sell it today you would lose (1.00) from holding SNDL Inc or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Analog Devices vs. SNDL Inc
Performance |
| Timeline |
| Analog Devices |
| SNDL Inc |
Analog Devices and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and SNDL
The main advantage of trading using opposite Analog Devices and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices 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.| Analog Devices vs. MACOM Technology Solutions | Analog Devices vs. FormFactor | Analog Devices vs. MaxLinear | Analog Devices vs. nLIGHT Inc |
Check out your portfolio center.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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