Correlation Between Hormel Foods and SunOpta
Can any of the company-specific risk be diversified away by investing in both Hormel Foods 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 Hormel Foods and SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hormel Foods and SunOpta, you can compare the effects of market volatilities on Hormel Foods 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 Hormel Foods with a short position of SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hormel Foods and SunOpta.
Diversification Opportunities for Hormel Foods and SunOpta
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hormel and SunOpta is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hormel Foods and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Hormel Foods 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 Hormel Foods 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 Hormel Foods i.e., Hormel Foods and SunOpta go up and down completely randomly.
Pair Corralation between Hormel Foods and SunOpta
Considering the 90-day investment horizon Hormel Foods is expected to generate 0.9 times more return on investment than SunOpta. However, Hormel Foods is 1.11 times less risky than SunOpta. It trades about -0.12 of its potential returns per unit of risk. SunOpta is currently generating about -0.14 per unit of risk. If you would invest 3,122 in Hormel Foods on November 3, 2024 and sell it today you would lose (124.00) from holding Hormel Foods or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hormel Foods vs. SunOpta
Performance |
| Timeline |
| Hormel Foods |
| SunOpta |
Hormel Foods and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hormel Foods and SunOpta
The main advantage of trading using opposite Hormel Foods and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hormel Foods 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.| Hormel Foods vs. Campbell Soup | Hormel Foods vs. General Mills | Hormel Foods vs. Kellanova | Hormel Foods vs. Lamb Weston Holdings |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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