Correlation Between SunOpta and United States
Can any of the company-specific risk be diversified away by investing in both SunOpta and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and United States Steel, you can compare the effects of market volatilities on SunOpta and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and United States.
Diversification Opportunities for SunOpta and United States
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SunOpta and United is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of SunOpta i.e., SunOpta and United States go up and down completely randomly.
Pair Corralation between SunOpta and United States
Given the investment horizon of 90 days SunOpta is expected to generate 0.98 times more return on investment than United States. However, SunOpta is 1.02 times less risky than United States. It trades about 0.4 of its potential returns per unit of risk. United States Steel is currently generating about 0.02 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. United States Steel
Performance |
| Timeline |
| SunOpta |
| United States Steel |
SunOpta and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and United States
The main advantage of trading using opposite SunOpta and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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