Correlation Between SNDL and Evertz Technologies
Can any of the company-specific risk be diversified away by investing in both SNDL and Evertz Technologies 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 Evertz Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Evertz Technologies Limited, you can compare the effects of market volatilities on SNDL and Evertz Technologies 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 Evertz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Evertz Technologies.
Diversification Opportunities for SNDL and Evertz Technologies
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SNDL and Evertz is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Evertz Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertz Technologies 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 Evertz Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertz Technologies has no effect on the direction of SNDL i.e., SNDL and Evertz Technologies go up and down completely randomly.
Pair Corralation between SNDL and Evertz Technologies
Given the investment horizon of 90 days SNDL Inc is expected to generate 1.78 times more return on investment than Evertz Technologies. However, SNDL is 1.78 times more volatile than Evertz Technologies Limited. It trades about -0.13 of its potential returns per unit of risk. Evertz Technologies Limited is currently generating about -0.33 per unit of risk. If you would invest 154.00 in SNDL Inc on January 11, 2025 and sell it today you would lose (15.00) from holding SNDL Inc or give up 9.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNDL Inc vs. Evertz Technologies Limited
Performance |
| Timeline |
| SNDL Inc |
| Evertz Technologies |
SNDL and Evertz Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Evertz Technologies
The main advantage of trading using opposite SNDL and Evertz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Evertz Technologies 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 Evertz Technologies will offset losses from the drop in Evertz Technologies' long position.The idea behind SNDL Inc and Evertz Technologies Limited 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |