Correlation Between Village Super and SNDL

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

Diversification Opportunities for Village Super and SNDL

VillageSNDLDiversified AwayVillageSNDLDiversified Away100%
-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Village and SNDL is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Village Super Market and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and Village Super 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 Village Super Market 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 Village Super i.e., Village Super and SNDL go up and down completely randomly.

Pair Corralation between Village Super and SNDL

Assuming the 90 days horizon Village Super Market is expected to under-perform the SNDL. But the stock apears to be less risky and, when comparing its historical volatility, Village Super Market is 1.94 times less risky than SNDL. The stock trades about -0.06 of its potential returns per unit of risk. The SNDL Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  174.00  in SNDL Inc on November 23, 2024 and sell it today you would earn a total of  3.00  from holding SNDL Inc or generate 1.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Village Super Market  vs.  SNDL Inc

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505
JavaScript chart by amCharts 3.21.15VLGEA SNDL
       Timeline  
Village Super Market 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Village Super Market has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Village Super is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb303132333435
SNDL Inc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.651.71.751.81.851.91.9522.05

Village Super and SNDL Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.9-4.42-2.94-1.460.01.482.964.445.92 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15VLGEA SNDL
       Returns  

Pair Trading with Village Super and SNDL

The main advantage of trading using opposite Village Super and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Super 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 Village Super Market 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.
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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