Correlation Between SunOpta and Griffon
Can any of the company-specific risk be diversified away by investing in both SunOpta and Griffon 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 Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Griffon, you can compare the effects of market volatilities on SunOpta and Griffon 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 Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Griffon.
Diversification Opportunities for SunOpta and Griffon
Poor diversification
The 3 months correlation between SunOpta and Griffon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of SunOpta i.e., SunOpta and Griffon go up and down completely randomly.
Pair Corralation between SunOpta and Griffon
Given the investment horizon of 90 days SunOpta is expected to generate 1.02 times more return on investment than Griffon. However, SunOpta is 1.02 times more volatile than Griffon. It trades about 0.07 of its potential returns per unit of risk. Griffon is currently generating about 0.07 per unit of risk. If you would invest 608.00 in SunOpta on September 2, 2024 and sell it today you would earn a total of 167.00 from holding SunOpta or generate 27.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Griffon
Performance |
| Timeline |
| SunOpta |
| Griffon |
SunOpta and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Griffon
The main advantage of trading using opposite SunOpta and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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