Correlation Between Renesas Electronics and SunOpta
Can any of the company-specific risk be diversified away by investing in both Renesas Electronics 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 Renesas Electronics and SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renesas Electronics and SunOpta, you can compare the effects of market volatilities on Renesas Electronics 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 Renesas Electronics with a short position of SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renesas Electronics and SunOpta.
Diversification Opportunities for Renesas Electronics and SunOpta
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Renesas and SunOpta is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Renesas Electronics and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Renesas Electronics 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 Renesas Electronics 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 Renesas Electronics i.e., Renesas Electronics and SunOpta go up and down completely randomly.
Pair Corralation between Renesas Electronics and SunOpta
Assuming the 90 days horizon Renesas Electronics is expected to generate 1.96 times more return on investment than SunOpta. However, Renesas Electronics is 1.96 times more volatile than SunOpta. It trades about 0.02 of its potential returns per unit of risk. SunOpta is currently generating about -0.14 per unit of risk. If you would invest 1,305 in Renesas Electronics on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Renesas Electronics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renesas Electronics vs. SunOpta
Performance |
| Timeline |
| Renesas Electronics |
| SunOpta |
Renesas Electronics and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renesas Electronics and SunOpta
The main advantage of trading using opposite Renesas Electronics and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renesas Electronics 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.| Renesas Electronics vs. Power Integrations | Renesas Electronics vs. Rohm Co Ltd | Renesas Electronics vs. MACOM Technology Solutions | Renesas Electronics vs. Renesas Electronics Corp |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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