Correlation Between Cronos and SNDL
Can any of the company-specific risk be diversified away by investing in both Cronos 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 Cronos and SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cronos Group and SNDL Inc, you can compare the effects of market volatilities on Cronos 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 Cronos with a short position of SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cronos and SNDL.
Diversification Opportunities for Cronos and SNDL
Very weak diversification
The 3 months correlation between Cronos and SNDL is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cronos Group and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and Cronos 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 Cronos Group 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 Cronos i.e., Cronos and SNDL go up and down completely randomly.
Pair Corralation between Cronos and SNDL
Given the investment horizon of 90 days Cronos Group is expected to under-perform the SNDL. In addition to that, Cronos is 1.0 times more volatile than SNDL Inc. It trades about -0.07 of its total potential returns per unit of risk. SNDL Inc is currently generating about -0.07 per unit of volatility. If you would invest 215.00 in SNDL Inc on August 24, 2024 and sell it today you would lose (17.00) from holding SNDL Inc or give up 7.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cronos Group vs. SNDL Inc
Performance |
| Timeline |
| Cronos Group |
| SNDL Inc |
Cronos and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cronos and SNDL
The main advantage of trading using opposite Cronos and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cronos 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.| Cronos vs. OrganiGram Holdings | Cronos vs. Aurora Cannabis | Cronos vs. SNDL Inc | Cronos vs. Canopy Growth Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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