Correlation Between SNDL and Lifevantage
Can any of the company-specific risk be diversified away by investing in both SNDL and Lifevantage 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 Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Lifevantage, you can compare the effects of market volatilities on SNDL and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Lifevantage.
Diversification Opportunities for SNDL and Lifevantage
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between SNDL and Lifevantage is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of SNDL i.e., SNDL and Lifevantage go up and down completely randomly.
Pair Corralation between SNDL and Lifevantage
Given the investment horizon of 90 days SNDL Inc is expected to under-perform the Lifevantage. In addition to that, SNDL is 1.11 times more volatile than Lifevantage. It trades about -0.08 of its total potential returns per unit of risk. Lifevantage is currently generating about 0.15 per unit of volatility. If you would invest 1,293 in Lifevantage on August 31, 2024 and sell it today you would earn a total of 147.00 from holding Lifevantage or generate 11.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNDL Inc vs. Lifevantage
Performance |
| Timeline |
| SNDL Inc |
| Lifevantage |
SNDL and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Lifevantage
The main advantage of trading using opposite SNDL and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.The idea behind SNDL Inc and Lifevantage 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.| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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