Correlation Between SunOpta and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both SunOpta and SBM Offshore 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 SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and SBM Offshore NV, you can compare the effects of market volatilities on SunOpta and SBM Offshore 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 SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and SBM Offshore.
Diversification Opportunities for SunOpta and SBM Offshore
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SunOpta and SBM is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and SBM Offshore NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM Offshore NV 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 SBM Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM Offshore NV has no effect on the direction of SunOpta i.e., SunOpta and SBM Offshore go up and down completely randomly.
Pair Corralation between SunOpta and SBM Offshore
Given the investment horizon of 90 days SunOpta is expected to generate 4.2 times more return on investment than SBM Offshore. However, SunOpta is 4.2 times more volatile than SBM Offshore NV. It trades about 0.38 of its potential returns per unit of risk. SBM Offshore NV is currently generating about 0.14 per unit of risk. If you would invest 598.00 in SunOpta on August 29, 2024 and sell it today you would earn a total of 183.00 from holding SunOpta or generate 30.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. SBM Offshore NV
Performance |
| Timeline |
| SunOpta |
| SBM Offshore NV |
SunOpta and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and SBM Offshore
The main advantage of trading using opposite SunOpta and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, SBM Offshore 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 SBM Offshore will offset losses from the drop in SBM Offshore's long position.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products | SunOpta vs. Associated British Foods |
| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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