Correlation Between Global Lights and SunOpta
Can any of the company-specific risk be diversified away by investing in both Global Lights and SunOpta 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 Global Lights and SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Lights Acquisition and SunOpta, you can compare the effects of market volatilities on Global Lights and SunOpta 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 Global Lights with a short position of SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Lights and SunOpta.
Diversification Opportunities for Global Lights and SunOpta
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and SunOpta is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Global Lights Acquisition and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Global Lights 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 Global Lights Acquisition are associated (or correlated) with SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Global Lights i.e., Global Lights and SunOpta go up and down completely randomly.
Pair Corralation between Global Lights and SunOpta
Given the investment horizon of 90 days Global Lights Acquisition is expected to generate 0.04 times more return on investment than SunOpta. However, Global Lights Acquisition is 24.64 times less risky than SunOpta. It trades about 0.11 of its potential returns per unit of risk. SunOpta is currently generating about -0.15 per unit of risk. If you would invest 1,064 in Global Lights Acquisition on October 10, 2024 and sell it today you would earn a total of 2.00 from holding Global Lights Acquisition or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Lights Acquisition vs. SunOpta
Performance |
| Timeline |
| Global Lights Acquisition |
| SunOpta |
Global Lights and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Lights and SunOpta
The main advantage of trading using opposite Global Lights and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Lights position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.| Global Lights vs. Tandem Diabetes Care | Global Lights vs. Helmerich and Payne | Global Lights vs. Amgen Inc | Global Lights vs. Seadrill Limited |
| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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