Correlation Between Bon Natural and SNDL
Can any of the company-specific risk be diversified away by investing in both Bon Natural 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 Bon Natural and SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bon Natural Life and SNDL Inc, you can compare the effects of market volatilities on Bon Natural 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 Bon Natural with a short position of SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bon Natural and SNDL.
Diversification Opportunities for Bon Natural and SNDL
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bon and SNDL is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bon Natural Life and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and Bon Natural 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 Bon Natural Life 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 Bon Natural i.e., Bon Natural and SNDL go up and down completely randomly.
Pair Corralation between Bon Natural and SNDL
Considering the 90-day investment horizon Bon Natural Life is expected to generate 1.06 times more return on investment than SNDL. However, Bon Natural is 1.06 times more volatile than SNDL Inc. It trades about 0.17 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.08 per unit of risk. If you would invest 147.00 in Bon Natural Life on August 28, 2024 and sell it today you would earn a total of 22.00 from holding Bon Natural Life or generate 14.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bon Natural Life vs. SNDL Inc
Performance |
| Timeline |
| Bon Natural Life |
| SNDL Inc |
Bon Natural and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bon Natural and SNDL
The main advantage of trading using opposite Bon Natural and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bon Natural 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.| Bon Natural vs. Blue Star Foods | Bon Natural vs. Grand Havana | Bon Natural vs. Real Good Food | Bon Natural vs. Central Garden Pet |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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