Correlation Between ENTERGY and SNDL
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By analyzing existing cross correlation between ENTERGY ARK INC and SNDL Inc, you can compare the effects of market volatilities on ENTERGY 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 ENTERGY with a short position of SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENTERGY and SNDL.
Diversification Opportunities for ENTERGY and SNDL
Average diversification
The 3 months correlation between ENTERGY and SNDL is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding ENTERGY ARK INC and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and ENTERGY 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 ENTERGY ARK INC 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 ENTERGY i.e., ENTERGY and SNDL go up and down completely randomly.
Pair Corralation between ENTERGY and SNDL
Assuming the 90 days trading horizon ENTERGY is expected to generate 31.07 times less return on investment than SNDL. But when comparing it to its historical volatility, ENTERGY ARK INC is 17.23 times less risky than SNDL. It trades about 0.02 of its potential returns per unit of risk. SNDL Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 145.00 in SNDL Inc on August 31, 2024 and sell it today you would earn a total of 48.00 from holding SNDL Inc or generate 33.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ENTERGY ARK INC vs. SNDL Inc
Performance |
| Timeline |
| ENTERGY ARK INC |
| SNDL Inc |
ENTERGY and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENTERGY and SNDL
The main advantage of trading using opposite ENTERGY and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENTERGY 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.The idea behind ENTERGY ARK INC and SNDL Inc 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.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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