Correlation Between SunOpta and Allient
Can any of the company-specific risk be diversified away by investing in both SunOpta and Allient 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 Allient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Allient, you can compare the effects of market volatilities on SunOpta and Allient 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 Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Allient.
Diversification Opportunities for SunOpta and Allient
Very poor diversification
The 3 months correlation between SunOpta and Allient is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient 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 Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of SunOpta i.e., SunOpta and Allient go up and down completely randomly.
Pair Corralation between SunOpta and Allient
Given the investment horizon of 90 days SunOpta is expected to under-perform the Allient. But the stock apears to be less risky and, when comparing its historical volatility, SunOpta is 1.6 times less risky than Allient. The stock trades about -0.1 of its potential returns per unit of risk. The Allient is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,401 in Allient on October 29, 2024 and sell it today you would earn a total of 261.00 from holding Allient or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Allient
Performance |
| Timeline |
| SunOpta |
| Allient |
SunOpta and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Allient
The main advantage of trading using opposite SunOpta and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| Allient vs. RCI Hospitality Holdings | Allient vs. BJs Restaurants | Allient vs. nLIGHT Inc | Allient vs. Portillos |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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