Correlation Between Suburban Propane and SNDL
Can any of the company-specific risk be diversified away by investing in both Suburban Propane and SNDL 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 Suburban Propane and SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suburban Propane Partners and SNDL Inc, you can compare the effects of market volatilities on Suburban Propane and SNDL 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 Suburban Propane with a short position of SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and SNDL.
Diversification Opportunities for Suburban Propane and SNDL
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Suburban and SNDL is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and Suburban Propane 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 Suburban Propane Partners are associated (or correlated) with SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Suburban Propane i.e., Suburban Propane and SNDL go up and down completely randomly.
Pair Corralation between Suburban Propane and SNDL
Considering the 90-day investment horizon Suburban Propane Partners is expected to generate 0.57 times more return on investment than SNDL. However, Suburban Propane Partners is 1.75 times less risky than SNDL. It trades about 0.1 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.11 per unit of risk. If you would invest 1,843 in Suburban Propane Partners on August 30, 2024 and sell it today you would earn a total of 92.00 from holding Suburban Propane Partners or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suburban Propane Partners vs. SNDL Inc
Performance |
| Timeline |
| Suburban Propane Partners |
| SNDL Inc |
Suburban Propane and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suburban Propane and SNDL
The main advantage of trading using opposite Suburban Propane and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane position performs unexpectedly, SNDL 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 SNDL will offset losses from the drop in SNDL's long position.| Suburban Propane vs. NewJersey Resources | Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. NorthWestern | Suburban Propane vs. Chesapeake Utilities |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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