Correlation Between SunOpta and RadNet
Can any of the company-specific risk be diversified away by investing in both SunOpta and RadNet 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 RadNet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and RadNet Inc, you can compare the effects of market volatilities on SunOpta and RadNet 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 RadNet. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and RadNet.
Diversification Opportunities for SunOpta and RadNet
Very poor diversification
The 3 months correlation between SunOpta and RadNet is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and RadNet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RadNet Inc 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 RadNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RadNet Inc has no effect on the direction of SunOpta i.e., SunOpta and RadNet go up and down completely randomly.
Pair Corralation between SunOpta and RadNet
Given the investment horizon of 90 days SunOpta is expected to generate 1.11 times more return on investment than RadNet. However, SunOpta is 1.11 times more volatile than RadNet Inc. It trades about 0.11 of its potential returns per unit of risk. RadNet Inc is currently generating about 0.08 per unit of risk. If you would invest 531.00 in SunOpta on September 19, 2024 and sell it today you would earn a total of 245.50 from holding SunOpta or generate 46.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. RadNet Inc
Performance |
| Timeline |
| SunOpta |
| RadNet Inc |
SunOpta and RadNet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and RadNet
The main advantage of trading using opposite SunOpta and RadNet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, RadNet 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 RadNet will offset losses from the drop in RadNet's long position.| SunOpta vs. Hill Street Beverage | SunOpta vs. Vita Coco | SunOpta vs. Coca Cola Femsa SAB | SunOpta vs. Coca Cola European Partners |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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