Correlation Between SNDL and NextNav Warrant
Can any of the company-specific risk be diversified away by investing in both SNDL and NextNav Warrant 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 NextNav Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and NextNav Warrant, you can compare the effects of market volatilities on SNDL and NextNav Warrant 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 NextNav Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and NextNav Warrant.
Diversification Opportunities for SNDL and NextNav Warrant
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between SNDL and NextNav is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant 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 NextNav Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextNav Warrant has no effect on the direction of SNDL i.e., SNDL and NextNav Warrant go up and down completely randomly.
Pair Corralation between SNDL and NextNav Warrant
Given the investment horizon of 90 days SNDL is expected to generate 108.77 times less return on investment than NextNav Warrant. But when comparing it to its historical volatility, SNDL Inc is 1.54 times less risky than NextNav Warrant. It trades about 0.01 of its potential returns per unit of risk. NextNav Warrant is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 235.00 in NextNav Warrant on September 2, 2024 and sell it today you would earn a total of 442.00 from holding NextNav Warrant or generate 188.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
SNDL Inc vs. NextNav Warrant
Performance |
| Timeline |
| SNDL Inc |
| NextNav Warrant |
SNDL and NextNav Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and NextNav Warrant
The main advantage of trading using opposite SNDL and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, NextNav Warrant 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 NextNav Warrant will offset losses from the drop in NextNav Warrant's long position.The idea behind SNDL Inc and NextNav Warrant 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.| NextNav Warrant vs. Aquagold International | NextNav Warrant vs. Morningstar Unconstrained Allocation | NextNav Warrant vs. Thrivent High Yield | NextNav Warrant vs. Via Renewables |
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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