Correlation Between SNDL and Outokumpu Oyj
Can any of the company-specific risk be diversified away by investing in both SNDL and Outokumpu Oyj 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 Outokumpu Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Outokumpu Oyj, you can compare the effects of market volatilities on SNDL and Outokumpu Oyj 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 Outokumpu Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Outokumpu Oyj.
Diversification Opportunities for SNDL and Outokumpu Oyj
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SNDL and Outokumpu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Outokumpu Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outokumpu Oyj 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 Outokumpu Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outokumpu Oyj has no effect on the direction of SNDL i.e., SNDL and Outokumpu Oyj go up and down completely randomly.
Pair Corralation between SNDL and Outokumpu Oyj
Given the investment horizon of 90 days SNDL Inc is expected to generate 3.87 times more return on investment than Outokumpu Oyj. However, SNDL is 3.87 times more volatile than Outokumpu Oyj. It trades about 0.04 of its potential returns per unit of risk. Outokumpu Oyj is currently generating about -0.1 per unit of risk. If you would invest 142.00 in SNDL Inc on September 12, 2024 and sell it today you would earn a total of 41.00 from holding SNDL Inc or generate 28.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 76.61% |
| Values | Daily Returns |
SNDL Inc vs. Outokumpu Oyj
Performance |
| Timeline |
| SNDL Inc |
| Outokumpu Oyj |
SNDL and Outokumpu Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Outokumpu Oyj
The main advantage of trading using opposite SNDL and Outokumpu Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Outokumpu Oyj 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 Outokumpu Oyj will offset losses from the drop in Outokumpu Oyj's long position.The idea behind SNDL Inc and Outokumpu Oyj 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.| Outokumpu Oyj vs. Senmiao Technology | Outokumpu Oyj vs. Tesla Inc | Outokumpu Oyj vs. Ziff Davis | Outokumpu Oyj vs. Perseus Mining Limited |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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