Correlation Between SNDL and Spectaire Holdings
Can any of the company-specific risk be diversified away by investing in both SNDL and Spectaire Holdings 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 Spectaire Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Spectaire Holdings, you can compare the effects of market volatilities on SNDL and Spectaire Holdings 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 Spectaire Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Spectaire Holdings.
Diversification Opportunities for SNDL and Spectaire Holdings
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SNDL and Spectaire is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Spectaire Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectaire Holdings 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 Spectaire Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectaire Holdings has no effect on the direction of SNDL i.e., SNDL and Spectaire Holdings go up and down completely randomly.
Pair Corralation between SNDL and Spectaire Holdings
Given the investment horizon of 90 days SNDL Inc is expected to generate 0.41 times more return on investment than Spectaire Holdings. However, SNDL Inc is 2.41 times less risky than Spectaire Holdings. It trades about 0.05 of its potential returns per unit of risk. Spectaire Holdings is currently generating about -0.12 per unit of risk. If you would invest 143.00 in SNDL Inc on September 6, 2024 and sell it today you would earn a total of 46.00 from holding SNDL Inc or generate 32.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 67.87% |
| Values | Daily Returns |
SNDL Inc vs. Spectaire Holdings
Performance |
| Timeline |
| SNDL Inc |
| Spectaire Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SNDL and Spectaire Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Spectaire Holdings
The main advantage of trading using opposite SNDL and Spectaire Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, Spectaire Holdings 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 Spectaire Holdings will offset losses from the drop in Spectaire Holdings' long position.The idea behind SNDL Inc and Spectaire Holdings 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.| Spectaire Holdings vs. Sun Country Airlines | Spectaire Holdings vs. Acumen Pharmaceuticals | Spectaire Holdings vs. Abcellera Biologics | Spectaire Holdings vs. Old Dominion Freight |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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