Correlation Between Sligro Food and SunOpta
Can any of the company-specific risk be diversified away by investing in both Sligro Food 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 Sligro Food and SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sligro Food Group and SunOpta, you can compare the effects of market volatilities on Sligro Food 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 Sligro Food with a short position of SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and SunOpta.
Diversification Opportunities for Sligro Food and SunOpta
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sligro and SunOpta is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Sligro Food 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 Sligro Food Group 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 Sligro Food i.e., Sligro Food and SunOpta go up and down completely randomly.
Pair Corralation between Sligro Food and SunOpta
Assuming the 90 days horizon Sligro Food Group is expected to under-perform the SunOpta. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 1.25 times less risky than SunOpta. The pink sheet trades about -0.22 of its potential returns per unit of risk. The SunOpta is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 598.00 in SunOpta on August 28, 2024 and sell it today you would earn a total of 174.00 from holding SunOpta or generate 29.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sligro Food Group vs. SunOpta
Performance |
| Timeline |
| Sligro Food Group |
| SunOpta |
Sligro Food and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and SunOpta
The main advantage of trading using opposite Sligro Food and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food 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.| Sligro Food vs. Timken Company | Sligro Food vs. World Houseware Limited | Sligro Food vs. Lincoln Electric Holdings | Sligro Food vs. NETGEAR |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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