Correlation Between SNDL and Canon
Can any of the company-specific risk be diversified away by investing in both SNDL and Canon 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 Canon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Canon Inc ADR, you can compare the effects of market volatilities on SNDL and Canon 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 Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Canon.
Diversification Opportunities for SNDL and Canon
Modest diversification
The 3 months correlation between SNDL and Canon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Canon Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc ADR 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 Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc ADR has no effect on the direction of SNDL i.e., SNDL and Canon go up and down completely randomly.
Pair Corralation between SNDL and Canon
If you would invest 2,190 in Canon Inc ADR on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Canon Inc ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
SNDL Inc vs. Canon Inc ADR
Performance |
| Timeline |
| SNDL Inc |
| Canon Inc ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SNDL and Canon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Canon
The main advantage of trading using opposite SNDL and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Canon 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 Canon will offset losses from the drop in Canon's long position.The idea behind SNDL Inc and Canon Inc ADR 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.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 CEOs Directory module to screen CEOs from public companies around the world.
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