Correlation Between SunOpta and Vita Coco
Can any of the company-specific risk be diversified away by investing in both SunOpta and Vita Coco 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 Vita Coco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Vita Coco, you can compare the effects of market volatilities on SunOpta and Vita Coco 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 Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Vita Coco.
Diversification Opportunities for SunOpta and Vita Coco
Poor diversification
The 3 months correlation between SunOpta and Vita is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco 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 Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of SunOpta i.e., SunOpta and Vita Coco go up and down completely randomly.
Pair Corralation between SunOpta and Vita Coco
Given the investment horizon of 90 days SunOpta is expected to generate 9.35 times less return on investment than Vita Coco. In addition to that, SunOpta is 1.16 times more volatile than Vita Coco. It trades about 0.01 of its total potential returns per unit of risk. Vita Coco is currently generating about 0.09 per unit of volatility. If you would invest 1,281 in Vita Coco on August 24, 2024 and sell it today you would earn a total of 2,331 from holding Vita Coco or generate 181.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Vita Coco
Performance |
| Timeline |
| SunOpta |
| Vita Coco |
SunOpta and Vita Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Vita Coco
The main advantage of trading using opposite SunOpta and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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