Correlation Between SNDL and COMCAST

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Can any of the company-specific risk be diversified away by investing in both SNDL and COMCAST 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 COMCAST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and COMCAST P NEW, you can compare the effects of market volatilities on SNDL and COMCAST 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 COMCAST. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and COMCAST.

Diversification Opportunities for SNDL and COMCAST

0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between SNDL and COMCAST is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and COMCAST P NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMCAST P NEW 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 COMCAST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMCAST P NEW has no effect on the direction of SNDL i.e., SNDL and COMCAST go up and down completely randomly.

Pair Corralation between SNDL and COMCAST

Given the investment horizon of 90 days SNDL is expected to generate 179.21 times less return on investment than COMCAST. But when comparing it to its historical volatility, SNDL Inc is 25.85 times less risky than COMCAST. It trades about 0.01 of its potential returns per unit of risk. COMCAST P NEW is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  11,042  in COMCAST P NEW on September 13, 2024 and sell it today you would earn a total of  450.00  from holding COMCAST P NEW or generate 4.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy53.24%
ValuesDaily Returns

SNDL Inc  vs.  COMCAST P NEW

 Performance 
       Timeline  
SNDL Inc 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days SNDL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
COMCAST P NEW 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days COMCAST P NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, COMCAST is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SNDL and COMCAST Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SNDL and COMCAST

The main advantage of trading using opposite SNDL and COMCAST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, COMCAST 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 COMCAST will offset losses from the drop in COMCAST's long position.
The idea behind SNDL Inc and COMCAST P NEW 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.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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