Correlation Between SunOpta and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both SunOpta and Minerals Technologies 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 Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Minerals Technologies, you can compare the effects of market volatilities on SunOpta and Minerals Technologies 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 Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Minerals Technologies.
Diversification Opportunities for SunOpta and Minerals Technologies
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SunOpta and Minerals is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of SunOpta i.e., SunOpta and Minerals Technologies go up and down completely randomly.
Pair Corralation between SunOpta and Minerals Technologies
Given the investment horizon of 90 days SunOpta is expected to generate 1.21 times more return on investment than Minerals Technologies. However, SunOpta is 1.21 times more volatile than Minerals Technologies. It trades about -0.02 of its potential returns per unit of risk. Minerals Technologies is currently generating about -0.3 per unit of risk. If you would invest 747.00 in SunOpta on November 28, 2024 and sell it today you would lose (8.00) from holding SunOpta or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Minerals Technologies
Performance |
| Timeline |
| SunOpta |
| Minerals Technologies |
SunOpta and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Minerals Technologies
The main advantage of trading using opposite SunOpta and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| Minerals Technologies vs. Quaker Chemical | Minerals Technologies vs. Innospec | Minerals Technologies vs. H B Fuller | Minerals Technologies vs. Cabot |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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