Correlation Between SunOpta and Sea
Can any of the company-specific risk be diversified away by investing in both SunOpta and Sea 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 Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Sea, you can compare the effects of market volatilities on SunOpta and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Sea.
Diversification Opportunities for SunOpta and Sea
Very weak diversification
The 3 months correlation between SunOpta and Sea is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of SunOpta i.e., SunOpta and Sea go up and down completely randomly.
Pair Corralation between SunOpta and Sea
Given the investment horizon of 90 days SunOpta is expected to generate 1.06 times more return on investment than Sea. However, SunOpta is 1.06 times more volatile than Sea. It trades about 0.41 of its potential returns per unit of risk. Sea is currently generating about 0.2 per unit of risk. If you would invest 576.00 in SunOpta on August 26, 2024 and sell it today you would earn a total of 194.00 from holding SunOpta or generate 33.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Sea
Performance |
| Timeline |
| SunOpta |
| Sea |
SunOpta and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Sea
The main advantage of trading using opposite SunOpta and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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