Correlation Between Safety Shot and SNDL
Can any of the company-specific risk be diversified away by investing in both Safety Shot 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 Safety Shot and SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Shot and SNDL Inc, you can compare the effects of market volatilities on Safety Shot 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 Safety Shot with a short position of SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Shot and SNDL.
Diversification Opportunities for Safety Shot and SNDL
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Safety and SNDL is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Safety Shot and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and Safety Shot 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 Safety Shot 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 Safety Shot i.e., Safety Shot and SNDL go up and down completely randomly.
Pair Corralation between Safety Shot and SNDL
Given the investment horizon of 90 days Safety Shot is expected to under-perform the SNDL. In addition to that, Safety Shot is 1.51 times more volatile than SNDL Inc. It trades about -0.25 of its total potential returns per unit of risk. SNDL Inc is currently generating about -0.11 per unit of volatility. If you would invest 221.00 in SNDL Inc on October 26, 2024 and sell it today you would lose (46.00) from holding SNDL Inc or give up 20.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Shot vs. SNDL Inc
Performance |
| Timeline |
| Safety Shot |
| SNDL Inc |
Safety Shot and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Shot and SNDL
The main advantage of trading using opposite Safety Shot and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Shot 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.| Safety Shot vs. NiSource | Safety Shot vs. Antero Midstream Partners | Safety Shot vs. Western Midstream Partners | Safety Shot vs. NioCorp Developments Ltd |
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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