Correlation Between Xylo Technologies and SNDL
Can any of the company-specific risk be diversified away by investing in both Xylo Technologies 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 Xylo Technologies and SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xylo Technologies and SNDL Inc, you can compare the effects of market volatilities on Xylo Technologies 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 Xylo Technologies with a short position of SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xylo Technologies and SNDL.
Diversification Opportunities for Xylo Technologies and SNDL
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xylo and SNDL is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Xylo Technologies and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and Xylo Technologies 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 Xylo Technologies 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 Xylo Technologies i.e., Xylo Technologies and SNDL go up and down completely randomly.
Pair Corralation between Xylo Technologies and SNDL
Given the investment horizon of 90 days Xylo Technologies is expected to under-perform the SNDL. In addition to that, Xylo Technologies is 1.28 times more volatile than SNDL Inc. It trades about -0.03 of its total potential returns per unit of risk. SNDL Inc is currently generating about 0.04 per unit of volatility. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xylo Technologies vs. SNDL Inc
Performance |
| Timeline |
| Xylo Technologies |
| SNDL Inc |
Xylo Technologies and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xylo Technologies and SNDL
The main advantage of trading using opposite Xylo Technologies and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xylo Technologies 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.| Xylo Technologies vs. Constellation Brands Class | Xylo Technologies vs. Usio Inc | Xylo Technologies vs. Diageo PLC ADR | Xylo Technologies vs. Scandinavian Tobacco Group |
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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