Correlation Between SunOpta and Nexxen International
Can any of the company-specific risk be diversified away by investing in both SunOpta and Nexxen International 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 Nexxen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Nexxen International, you can compare the effects of market volatilities on SunOpta and Nexxen International 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 Nexxen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Nexxen International.
Diversification Opportunities for SunOpta and Nexxen International
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SunOpta and Nexxen is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Nexxen International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexxen International 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 Nexxen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexxen International has no effect on the direction of SunOpta i.e., SunOpta and Nexxen International go up and down completely randomly.
Pair Corralation between SunOpta and Nexxen International
Given the investment horizon of 90 days SunOpta is expected to generate 0.61 times more return on investment than Nexxen International. However, SunOpta is 1.65 times less risky than Nexxen International. It trades about 0.4 of its potential returns per unit of risk. Nexxen International is currently generating about 0.22 per unit of risk. If you would invest 598.00 in SunOpta on August 27, 2024 and sell it today you would earn a total of 184.00 from holding SunOpta or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Nexxen International
Performance |
| Timeline |
| SunOpta |
| Nexxen International |
SunOpta and Nexxen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Nexxen International
The main advantage of trading using opposite SunOpta and Nexxen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Nexxen International 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 Nexxen International will offset losses from the drop in Nexxen International's long position.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| Nexxen International vs. Toro Co | Nexxen International vs. Newell Brands | Nexxen International vs. Lincoln Electric Holdings | Nexxen International vs. RBC Bearings Incorporated |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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