Correlation Between SNDL and Ault Alliance
Can any of the company-specific risk be diversified away by investing in both SNDL and Ault Alliance 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 Ault Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Ault Alliance, you can compare the effects of market volatilities on SNDL and Ault Alliance 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 Ault Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Ault Alliance.
Diversification Opportunities for SNDL and Ault Alliance
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between SNDL and Ault is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Ault Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ault Alliance 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 Ault Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ault Alliance has no effect on the direction of SNDL i.e., SNDL and Ault Alliance go up and down completely randomly.
Pair Corralation between SNDL and Ault Alliance
Given the investment horizon of 90 days SNDL Inc is expected to generate 0.55 times more return on investment than Ault Alliance. However, SNDL Inc is 1.82 times less risky than Ault Alliance. It trades about 0.01 of its potential returns per unit of risk. Ault Alliance is currently generating about -0.19 per unit of risk. If you would invest 218.00 in SNDL Inc on September 3, 2024 and sell it today you would lose (24.00) from holding SNDL Inc or give up 11.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.61% |
| Values | Daily Returns |
SNDL Inc vs. Ault Alliance
Performance |
| Timeline |
| SNDL Inc |
| Ault Alliance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
SNDL and Ault Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Ault Alliance
The main advantage of trading using opposite SNDL and Ault Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Ault Alliance 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 Ault Alliance will offset losses from the drop in Ault Alliance's long position.The idea behind SNDL Inc and Ault Alliance 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.| Ault Alliance vs. Meiwu Technology Co | Ault Alliance vs. Reservoir Media | Ault Alliance vs. Weibo Corp | Ault Alliance vs. NETGEAR |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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