Correlation Between SNDL and Hawkins
Can any of the company-specific risk be diversified away by investing in both SNDL and Hawkins 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 Hawkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Hawkins, you can compare the effects of market volatilities on SNDL and Hawkins 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 Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Hawkins.
Diversification Opportunities for SNDL and Hawkins
Excellent diversification
The 3 months correlation between SNDL and Hawkins is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of SNDL i.e., SNDL and Hawkins go up and down completely randomly.
Pair Corralation between SNDL and Hawkins
Given the investment horizon of 90 days SNDL is expected to generate 4.22 times less return on investment than Hawkins. In addition to that, SNDL is 1.24 times more volatile than Hawkins. It trades about 0.01 of its total potential returns per unit of risk. Hawkins is currently generating about 0.07 per unit of volatility. If you would invest 12,196 in Hawkins on August 31, 2024 and sell it today you would earn a total of 1,143 from holding Hawkins or generate 9.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNDL Inc vs. Hawkins
Performance |
| Timeline |
| SNDL Inc |
| Hawkins |
SNDL and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Hawkins
The main advantage of trading using opposite SNDL and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.The idea behind SNDL Inc and Hawkins 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.| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |