Correlation Between Church Dwight and SNDL
Can any of the company-specific risk be diversified away by investing in both Church Dwight 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 Church Dwight and SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Church Dwight and SNDL Inc, you can compare the effects of market volatilities on Church Dwight 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 Church Dwight with a short position of SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Church Dwight and SNDL.
Diversification Opportunities for Church Dwight and SNDL
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Church and SNDL is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Church Dwight and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and Church Dwight 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 Church Dwight 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 Church Dwight i.e., Church Dwight and SNDL go up and down completely randomly.
Pair Corralation between Church Dwight and SNDL
Considering the 90-day investment horizon Church Dwight is expected to generate 0.33 times more return on investment than SNDL. However, Church Dwight is 3.02 times less risky than SNDL. It trades about 0.32 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.08 per unit of risk. If you would invest 10,078 in Church Dwight on August 28, 2024 and sell it today you would earn a total of 963.00 from holding Church Dwight or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Church Dwight vs. SNDL Inc
Performance |
| Timeline |
| Church Dwight |
| SNDL Inc |
Church Dwight and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Church Dwight and SNDL
The main advantage of trading using opposite Church Dwight and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Church Dwight 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.| Church Dwight vs. Kimberly Clark | Church Dwight vs. Colgate Palmolive | Church Dwight vs. Unilever PLC ADR | Church Dwight vs. Procter Gamble |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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