Correlation Between SunOpta and Dana
Can any of the company-specific risk be diversified away by investing in both SunOpta and Dana 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 Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Dana Inc, you can compare the effects of market volatilities on SunOpta and Dana 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 Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Dana.
Diversification Opportunities for SunOpta and Dana
Modest diversification
The 3 months correlation between SunOpta and Dana is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc 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 Dana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Inc has no effect on the direction of SunOpta i.e., SunOpta and Dana go up and down completely randomly.
Pair Corralation between SunOpta and Dana
Given the investment horizon of 90 days SunOpta is expected to under-perform the Dana. But the stock apears to be less risky and, when comparing its historical volatility, SunOpta is 1.42 times less risky than Dana. The stock trades about -0.26 of its potential returns per unit of risk. The Dana Inc is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,179 in Dana Inc on October 25, 2024 and sell it today you would earn a total of 153.00 from holding Dana Inc or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Dana Inc
Performance |
| Timeline |
| SunOpta |
| Dana Inc |
SunOpta and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Dana
The main advantage of trading using opposite SunOpta and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Dana 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 Dana will offset losses from the drop in Dana's long position.| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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