Correlation Between ZhongAn Online and SNDL
Can any of the company-specific risk be diversified away by investing in both ZhongAn Online 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 ZhongAn Online and SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZhongAn Online P and SNDL Inc, you can compare the effects of market volatilities on ZhongAn Online 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 ZhongAn Online with a short position of SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and SNDL.
Diversification Opportunities for ZhongAn Online and SNDL
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between ZhongAn and SNDL is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc and ZhongAn Online 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 ZhongAn Online P 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 ZhongAn Online i.e., ZhongAn Online and SNDL go up and down completely randomly.
Pair Corralation between ZhongAn Online and SNDL
Assuming the 90 days horizon ZhongAn Online P is expected to under-perform the SNDL. But the pink sheet apears to be less risky and, when comparing its historical volatility, ZhongAn Online P is 1.3 times less risky than SNDL. The pink sheet trades about -0.05 of its potential returns per unit of risk. The SNDL Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 230.00 in SNDL Inc on October 11, 2024 and sell it today you would lose (42.00) from holding SNDL Inc or give up 18.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZhongAn Online P vs. SNDL Inc
Performance |
| Timeline |
| ZhongAn Online P |
| SNDL Inc |
ZhongAn Online and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZhongAn Online and SNDL
The main advantage of trading using opposite ZhongAn Online and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online 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.| ZhongAn Online vs. Progressive Corp | ZhongAn Online vs. White Mountains Insurance | ZhongAn Online vs. Chubb | ZhongAn Online vs. W R Berkley |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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