Correlation Between SNDL and Golden Star
Can any of the company-specific risk be diversified away by investing in both SNDL and Golden Star 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 Golden Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Golden Star Acquisition, you can compare the effects of market volatilities on SNDL and Golden Star 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 Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Golden Star.
Diversification Opportunities for SNDL and Golden Star
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SNDL and Golden is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Golden Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Acquisition 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 Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Acquisition has no effect on the direction of SNDL i.e., SNDL and Golden Star go up and down completely randomly.
Pair Corralation between SNDL and Golden Star
Given the investment horizon of 90 days SNDL is expected to generate 3.43 times less return on investment than Golden Star. In addition to that, SNDL is 1.51 times more volatile than Golden Star Acquisition. It trades about 0.01 of its total potential returns per unit of risk. Golden Star Acquisition is currently generating about 0.03 per unit of volatility. If you would invest 1,123 in Golden Star Acquisition on September 3, 2024 and sell it today you would earn a total of 26.00 from holding Golden Star Acquisition or generate 2.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNDL Inc vs. Golden Star Acquisition
Performance |
| Timeline |
| SNDL Inc |
| Golden Star Acquisition |
SNDL and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Golden Star
The main advantage of trading using opposite SNDL and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Golden Star 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 Golden Star will offset losses from the drop in Golden Star's long position.The idea behind SNDL Inc and Golden Star Acquisition 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.| Golden Star vs. Marblegate Acquisition Corp | Golden Star vs. Alpha One | Golden Star vs. Manaris Corp | Golden Star vs. SCOR PK |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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