Correlation Between SNDL and Aegon Funding
Can any of the company-specific risk be diversified away by investing in both SNDL and Aegon Funding 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 SNDL and Aegon Funding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Aegon Funding, you can compare the effects of market volatilities on SNDL and Aegon Funding 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 SNDL with a short position of Aegon Funding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Aegon Funding.
Diversification Opportunities for SNDL and Aegon Funding
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SNDL and Aegon is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Aegon Funding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon Funding and SNDL 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 SNDL Inc are associated (or correlated) with Aegon Funding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon Funding has no effect on the direction of SNDL i.e., SNDL and Aegon Funding go up and down completely randomly.
Pair Corralation between SNDL and Aegon Funding
Given the investment horizon of 90 days SNDL Inc is expected to under-perform the Aegon Funding. In addition to that, SNDL is 1.28 times more volatile than Aegon Funding. It trades about -0.32 of its total potential returns per unit of risk. Aegon Funding is currently generating about -0.04 per unit of volatility. If you would invest 2,130 in Aegon Funding on September 13, 2024 and sell it today you would lose (18.50) from holding Aegon Funding or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNDL Inc vs. Aegon Funding
Performance |
| Timeline |
| SNDL Inc |
| Aegon Funding |
SNDL and Aegon Funding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Aegon Funding
The main advantage of trading using opposite SNDL and Aegon Funding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Aegon Funding 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 Aegon Funding will offset losses from the drop in Aegon Funding's long position.The idea behind SNDL Inc and Aegon Funding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aegon Funding vs. PepsiCo | Aegon Funding vs. Mayfair Gold Corp | Aegon Funding vs. HF Sinclair Corp | Aegon Funding vs. Primo Brands |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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