Correlation Between SNDL and Fluent
Can any of the company-specific risk be diversified away by investing in both SNDL and Fluent 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 Fluent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Fluent Inc, you can compare the effects of market volatilities on SNDL and Fluent 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 Fluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Fluent.
Diversification Opportunities for SNDL and Fluent
Significant diversification
The 3 months correlation between SNDL and Fluent is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc 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 Fluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluent Inc has no effect on the direction of SNDL i.e., SNDL and Fluent go up and down completely randomly.
Pair Corralation between SNDL and Fluent
Given the investment horizon of 90 days SNDL Inc is expected to under-perform the Fluent. But the stock apears to be less risky and, when comparing its historical volatility, SNDL Inc is 1.3 times less risky than Fluent. The stock trades about -0.04 of its potential returns per unit of risk. The Fluent Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 359.00 in Fluent Inc on November 28, 2024 and sell it today you would lose (71.00) from holding Fluent Inc or give up 19.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNDL Inc vs. Fluent Inc
Performance |
| Timeline |
| SNDL Inc |
| Fluent Inc |
SNDL and Fluent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Fluent
The main advantage of trading using opposite SNDL and Fluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Fluent 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 Fluent will offset losses from the drop in Fluent's long position.The idea behind SNDL Inc and Fluent Inc 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.| Fluent vs. Marchex | Fluent vs. Dolphin Entertainment | Fluent vs. Beyond Commerce | Fluent vs. MGO Global Common |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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