Correlation Between SunOpta and Genuine Parts
Can any of the company-specific risk be diversified away by investing in both SunOpta and Genuine Parts 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 Genuine Parts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Genuine Parts Co, you can compare the effects of market volatilities on SunOpta and Genuine Parts 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 Genuine Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Genuine Parts.
Diversification Opportunities for SunOpta and Genuine Parts
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SunOpta and Genuine is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Genuine Parts Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuine Parts 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 Genuine Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genuine Parts has no effect on the direction of SunOpta i.e., SunOpta and Genuine Parts go up and down completely randomly.
Pair Corralation between SunOpta and Genuine Parts
Given the investment horizon of 90 days SunOpta is expected to under-perform the Genuine Parts. In addition to that, SunOpta is 1.39 times more volatile than Genuine Parts Co. It trades about -0.19 of its total potential returns per unit of risk. Genuine Parts Co is currently generating about -0.02 per unit of volatility. If you would invest 11,686 in Genuine Parts Co on November 4, 2024 and sell it today you would lose (61.00) from holding Genuine Parts Co or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Genuine Parts Co
Performance |
| Timeline |
| SunOpta |
| Genuine Parts |
SunOpta and Genuine Parts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Genuine Parts
The main advantage of trading using opposite SunOpta and Genuine Parts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Genuine Parts 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 Genuine Parts will offset losses from the drop in Genuine Parts' 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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