Correlation Between SNDL and Pinterest
Can any of the company-specific risk be diversified away by investing in both SNDL and Pinterest 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 Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Pinterest, you can compare the effects of market volatilities on SNDL and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Pinterest.
Diversification Opportunities for SNDL and Pinterest
Significant diversification
The 3 months correlation between SNDL and Pinterest is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of SNDL i.e., SNDL and Pinterest go up and down completely randomly.
Pair Corralation between SNDL and Pinterest
Given the investment horizon of 90 days SNDL Inc is expected to under-perform the Pinterest. In addition to that, SNDL is 1.13 times more volatile than Pinterest. It trades about -0.11 of its total potential returns per unit of risk. Pinterest is currently generating about -0.06 per unit of volatility. If you would invest 3,226 in Pinterest on August 29, 2024 and sell it today you would lose (194.00) from holding Pinterest or give up 6.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNDL Inc vs. Pinterest
Performance |
| Timeline |
| SNDL Inc |
SNDL and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Pinterest
The main advantage of trading using opposite SNDL and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.The idea behind SNDL Inc and Pinterest 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.| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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