Correlation Between SunOpta and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both SunOpta and Grocery Outlet 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 Grocery Outlet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Grocery Outlet Holding, you can compare the effects of market volatilities on SunOpta and Grocery Outlet 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 Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Grocery Outlet.
Diversification Opportunities for SunOpta and Grocery Outlet
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SunOpta and Grocery is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Grocery Outlet Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grocery Outlet Holding 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 Grocery Outlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grocery Outlet Holding has no effect on the direction of SunOpta i.e., SunOpta and Grocery Outlet go up and down completely randomly.
Pair Corralation between SunOpta and Grocery Outlet
Given the investment horizon of 90 days SunOpta is expected to under-perform the Grocery Outlet. But the stock apears to be less risky and, when comparing its historical volatility, SunOpta is 1.64 times less risky than Grocery Outlet. The stock trades about -0.14 of its potential returns per unit of risk. The Grocery Outlet Holding is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,630 in Grocery Outlet Holding on November 3, 2024 and sell it today you would lose (11.00) from holding Grocery Outlet Holding or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Grocery Outlet Holding
Performance |
| Timeline |
| SunOpta |
| Grocery Outlet Holding |
SunOpta and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Grocery Outlet
The main advantage of trading using opposite SunOpta and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Grocery Outlet 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 Grocery Outlet will offset losses from the drop in Grocery Outlet's long position.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |