Correlation Between SNDL and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both SNDL and ZhongAn Online 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 ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and ZhongAn Online P, you can compare the effects of market volatilities on SNDL and ZhongAn Online 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 ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and ZhongAn Online.
Diversification Opportunities for SNDL and ZhongAn Online
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between SNDL and ZhongAn is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P 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 ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of SNDL i.e., SNDL and ZhongAn Online go up and down completely randomly.
Pair Corralation between SNDL and ZhongAn Online
Given the investment horizon of 90 days SNDL Inc is expected to generate 1.3 times more return on investment than ZhongAn Online. However, SNDL is 1.3 times more volatile than ZhongAn Online P. It trades about 0.01 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.05 per unit of risk. If you would invest 230.00 in SNDL Inc on October 11, 2024 and sell it today you would lose (42.00) from holding SNDL Inc or give up 18.26% 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. ZhongAn Online P
Performance |
| Timeline |
| SNDL Inc |
| ZhongAn Online P |
SNDL and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and ZhongAn Online
The main advantage of trading using opposite SNDL and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.The idea behind SNDL Inc and ZhongAn Online P 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.| ZhongAn Online vs. Progressive Corp | ZhongAn Online vs. White Mountains Insurance | ZhongAn Online vs. Chubb | ZhongAn Online vs. W R Berkley |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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