Correlation Between Mosaic and SunOpta
Can any of the company-specific risk be diversified away by investing in both Mosaic 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 Mosaic and SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Mosaic and SunOpta, you can compare the effects of market volatilities on Mosaic 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 Mosaic with a short position of SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mosaic and SunOpta.
Diversification Opportunities for Mosaic and SunOpta
Good diversification
The 3 months correlation between Mosaic and SunOpta is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Mosaic 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 The Mosaic 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 Mosaic i.e., Mosaic and SunOpta go up and down completely randomly.
Pair Corralation between Mosaic and SunOpta
Considering the 90-day investment horizon The Mosaic is expected to under-perform the SunOpta. But the stock apears to be less risky and, when comparing its historical volatility, The Mosaic is 1.68 times less risky than SunOpta. The stock trades about -0.04 of its potential returns per unit of risk. The SunOpta is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 610.00 in SunOpta on August 23, 2024 and sell it today you would earn a total of 160.00 from holding SunOpta or generate 26.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Mosaic vs. SunOpta
Performance |
| Timeline |
| Mosaic |
| SunOpta |
Mosaic and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mosaic and SunOpta
The main advantage of trading using opposite Mosaic and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mosaic 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.The idea behind The Mosaic and SunOpta pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Natures Sunshine Products | SunOpta vs. J J Snack | SunOpta vs. John B Sanfilippo |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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