Correlation Between SunOpta and Archrock

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Can any of the company-specific risk be diversified away by investing in both SunOpta and Archrock 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 Archrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Archrock Partners 6875, you can compare the effects of market volatilities on SunOpta and Archrock 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 Archrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Archrock.

Diversification Opportunities for SunOpta and Archrock

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between SunOpta and Archrock is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Archrock Partners 6875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archrock Partners 6875 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 Archrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archrock Partners 6875 has no effect on the direction of SunOpta i.e., SunOpta and Archrock go up and down completely randomly.

Pair Corralation between SunOpta and Archrock

Given the investment horizon of 90 days SunOpta is expected to generate 2.43 times more return on investment than Archrock. However, SunOpta is 2.43 times more volatile than Archrock Partners 6875. It trades about 0.29 of its potential returns per unit of risk. Archrock Partners 6875 is currently generating about -0.22 per unit of risk. If you would invest  675.00  in SunOpta on September 5, 2024 and sell it today you would earn a total of  97.00  from holding SunOpta or generate 14.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy81.82%
ValuesDaily Returns

SunOpta  vs.  Archrock Partners 6875

 Performance 
       Timeline  
SunOpta 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, SunOpta disclosed solid returns over the last few months and may actually be approaching a breakup point.
Archrock Partners 6875 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Archrock Partners 6875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Archrock is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SunOpta and Archrock Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SunOpta and Archrock

The main advantage of trading using opposite SunOpta and Archrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Archrock 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 Archrock will offset losses from the drop in Archrock's long position.
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The idea behind SunOpta and Archrock Partners 6875 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Global Correlations module to find global opportunities by holding instruments from different markets.

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