Correlation Between RF Acquisition and SNDL
Can any of the company-specific risk be diversified away by investing in both RF Acquisition 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 RF Acquisition and SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RF Acquisition Corp and SNDL Inc, you can compare the effects of market volatilities on RF Acquisition 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 RF Acquisition with a short position of SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Acquisition and SNDL.
Diversification Opportunities for RF Acquisition and SNDL
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RFACR and SNDL is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding RF Acquisition Corp and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and RF Acquisition 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 RF Acquisition Corp 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 RF Acquisition i.e., RF Acquisition and SNDL go up and down completely randomly.
Pair Corralation between RF Acquisition and SNDL
Assuming the 90 days horizon RF Acquisition Corp is expected to generate 56.42 times more return on investment than SNDL. However, RF Acquisition is 56.42 times more volatile than SNDL Inc. It trades about 0.23 of its potential returns per unit of risk. SNDL Inc is currently generating about 0.04 per unit of risk. If you would invest 11.00 in RF Acquisition Corp on August 31, 2024 and sell it today you would lose (2.10) from holding RF Acquisition Corp or give up 19.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 34.49% |
| Values | Daily Returns |
RF Acquisition Corp vs. SNDL Inc
Performance |
| Timeline |
| RF Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| SNDL Inc |
RF Acquisition and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RF Acquisition and SNDL
The main advantage of trading using opposite RF Acquisition and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Acquisition 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.| RF Acquisition vs. Mativ Holdings | RF Acquisition vs. Chemours Co | RF Acquisition vs. Link Real Estate | RF Acquisition vs. Eastman Chemical |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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