Correlation Between SNDL and YanGuFang International
Can any of the company-specific risk be diversified away by investing in both SNDL and YanGuFang International 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 YanGuFang International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and YanGuFang International Group, you can compare the effects of market volatilities on SNDL and YanGuFang International 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 YanGuFang International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and YanGuFang International.
Diversification Opportunities for SNDL and YanGuFang International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SNDL and YanGuFang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and YanGuFang International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YanGuFang International 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 YanGuFang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YanGuFang International has no effect on the direction of SNDL i.e., SNDL and YanGuFang International go up and down completely randomly.
Pair Corralation between SNDL and YanGuFang International
Given the investment horizon of 90 days SNDL Inc is expected to generate 0.45 times more return on investment than YanGuFang International. However, SNDL Inc is 2.21 times less risky than YanGuFang International. It trades about 0.01 of its potential returns per unit of risk. YanGuFang International Group is currently generating about -0.12 per unit of risk. If you would invest 250.00 in SNDL Inc on August 30, 2024 and sell it today you would lose (54.00) from holding SNDL Inc or give up 21.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 58.67% |
| Values | Daily Returns |
SNDL Inc vs. YanGuFang International Group
Performance |
| Timeline |
| SNDL Inc |
| YanGuFang International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SNDL and YanGuFang International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and YanGuFang International
The main advantage of trading using opposite SNDL and YanGuFang International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, YanGuFang International 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 YanGuFang International will offset losses from the drop in YanGuFang International's long position.The idea behind SNDL Inc and YanGuFang International Group 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.| YanGuFang International vs. Rackspace Technology | YanGuFang International vs. Kaiser Aluminum | YanGuFang International vs. IPG Photonics | YanGuFang International vs. Datadog |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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