Correlation Between SunOpta and Neogen
Can any of the company-specific risk be diversified away by investing in both SunOpta and Neogen 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 Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Neogen, you can compare the effects of market volatilities on SunOpta and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Neogen.
Diversification Opportunities for SunOpta and Neogen
Significant diversification
The 3 months correlation between SunOpta and Neogen is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of SunOpta i.e., SunOpta and Neogen go up and down completely randomly.
Pair Corralation between SunOpta and Neogen
Given the investment horizon of 90 days SunOpta is expected to generate 1.27 times more return on investment than Neogen. However, SunOpta is 1.27 times more volatile than Neogen. It trades about 0.01 of its potential returns per unit of risk. Neogen is currently generating about 0.01 per unit of risk. If you would invest 848.00 in SunOpta on September 3, 2024 and sell it today you would lose (73.00) from holding SunOpta or give up 8.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Neogen
Performance |
| Timeline |
| SunOpta |
| Neogen |
SunOpta and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Neogen
The main advantage of trading using opposite SunOpta and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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