Correlation Between SNDL and First Republic
Can any of the company-specific risk be diversified away by investing in both SNDL and First Republic 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 First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and First Republic Bank, you can compare the effects of market volatilities on SNDL and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and First Republic.
Diversification Opportunities for SNDL and First Republic
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SNDL and First is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of SNDL i.e., SNDL and First Republic go up and down completely randomly.
Pair Corralation between SNDL and First Republic
If you would invest 164.00 in SNDL Inc on August 25, 2024 and sell it today you would earn a total of 34.00 from holding SNDL Inc or generate 20.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.44% |
| Values | Daily Returns |
SNDL Inc vs. First Republic Bank
Performance |
| Timeline |
| SNDL Inc |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SNDL and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and First Republic
The main advantage of trading using opposite SNDL and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.The idea behind SNDL Inc and First Republic Bank 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.| First Republic vs. AmTrust Financial Services | First Republic vs. Chiba Bank Ltd | First Republic vs. SNDL Inc | First Republic vs. Glacier Bancorp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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