Correlation Between SunOpta and Endeavour Mining

Can any of the company-specific risk be diversified away by investing in both SunOpta and Endeavour Mining 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 Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SunOpta and Endeavour Mining Corp, you can compare the effects of market volatilities on SunOpta and Endeavour Mining 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 Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Endeavour Mining.

Diversification Opportunities for SunOpta and Endeavour Mining

-0.81

Correlation Coefficient

SunOpta  Endeavour Mining

Pay attention - limited upside

The 3 months correlation between SunOpta and Endeavour is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Endeavour Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining Corp 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 Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining Corp has no effect on the direction of SunOpta i.e., SunOpta and Endeavour Mining go up and down completely randomly.

Pair Corralation between SunOpta and Endeavour Mining

Assuming the 90 days trading horizon SunOpta is expected to generate 1.11 times more return on investment than Endeavour Mining. However, SunOpta is 1.11 times more volatile than Endeavour Mining Corp. It trades about 0.15 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about -0.01 per unit of risk. If you would invest  872.00  in SunOpta on September 12, 2024 and sell it today you would earn a total of  251.00  from holding SunOpta or generate 28.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

SunOpta  vs.  Endeavour Mining Corp

SunOpta

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, SunOpta displayed solid returns over the last few months and may actually be approaching a breakup point.

Endeavour Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endeavour Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Endeavour Mining is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SunOpta and Endeavour Mining

The main advantage of trading using opposite SunOpta and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Endeavour Mining 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 Endeavour Mining will offset losses from the drop in Endeavour Mining's long position.

The idea behind SunOpta and Endeavour Mining Corp 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.