Correlation Between Village Super and SNDL
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
-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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Village Super Market vs. SNDL Inc
Performance |
Timeline |
Village Super Market |
SNDL Inc |
Village Super and SNDL Volatility Contrast
Predicted Return Density |
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.Village Super vs. Ingles Markets Incorporated | ||
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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