Correlation Between SunOpta and MCF Energy
Can any of the company-specific risk be diversified away by investing in both SunOpta and MCF Energy 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 MCF Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and MCF Energy, you can compare the effects of market volatilities on SunOpta and MCF Energy 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 MCF Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and MCF Energy.
Diversification Opportunities for SunOpta and MCF Energy
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SunOpta and MCF is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and MCF Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCF Energy 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 MCF Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCF Energy has no effect on the direction of SunOpta i.e., SunOpta and MCF Energy go up and down completely randomly.
Pair Corralation between SunOpta and MCF Energy
Given the investment horizon of 90 days SunOpta is expected to generate 0.57 times more return on investment than MCF Energy. However, SunOpta is 1.76 times less risky than MCF Energy. It trades about 0.01 of its potential returns per unit of risk. MCF Energy is currently generating about -0.04 per unit of risk. If you would invest 833.00 in SunOpta on September 13, 2024 and sell it today you would lose (54.00) from holding SunOpta or give up 6.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
SunOpta vs. MCF Energy
Performance |
| Timeline |
| SunOpta |
| MCF Energy |
SunOpta and MCF Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and MCF Energy
The main advantage of trading using opposite SunOpta and MCF Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, MCF Energy 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 MCF Energy will offset losses from the drop in MCF Energy's long position.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| MCF Energy vs. The Joint Corp | MCF Energy vs. NH Foods Ltd | MCF Energy vs. SunOpta | MCF Energy vs. AMCON Distributing |
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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