Correlation Between SunOpta and Analog Devices
Can any of the company-specific risk be diversified away by investing in both SunOpta and Analog Devices 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 SunOpta and Analog Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Analog Devices, you can compare the effects of market volatilities on SunOpta and Analog Devices 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 SunOpta with a short position of Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Analog Devices.
Diversification Opportunities for SunOpta and Analog Devices
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SunOpta and Analog is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices and SunOpta 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 SunOpta are associated (or correlated) with Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of SunOpta i.e., SunOpta and Analog Devices go up and down completely randomly.
Pair Corralation between SunOpta and Analog Devices
Given the investment horizon of 90 days SunOpta is expected to generate 1.95 times more return on investment than Analog Devices. However, SunOpta is 1.95 times more volatile than Analog Devices. It trades about 0.03 of its potential returns per unit of risk. Analog Devices is currently generating about 0.04 per unit of risk. If you would invest 690.00 in SunOpta on August 31, 2024 and sell it today you would earn a total of 85.00 from holding SunOpta or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Analog Devices
Performance |
| Timeline |
| SunOpta |
| Analog Devices |
SunOpta and Analog Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Analog Devices
The main advantage of trading using opposite SunOpta and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.| SunOpta vs. Central Garden Pet | SunOpta vs. Bridgford Foods | SunOpta vs. Lancaster Colony | SunOpta vs. HUMANA INC |
| Analog Devices vs. MACOM Technology Solutions | Analog Devices vs. FormFactor | Analog Devices vs. MaxLinear | Analog Devices vs. nLIGHT Inc |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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