Correlation Between SunOpta and Dow Jones
Can any of the company-specific risk be diversified away by investing in both SunOpta and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Dow Jones Industrial, you can compare the effects of market volatilities on SunOpta and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Dow Jones.
Diversification Opportunities for SunOpta and Dow Jones
Poor diversification
The 3 months correlation between SunOpta and Dow is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of SunOpta i.e., SunOpta and Dow Jones go up and down completely randomly.
Pair Corralation between SunOpta and Dow Jones
Given the investment horizon of 90 days SunOpta is expected to generate 3.73 times more return on investment than Dow Jones. However, SunOpta is 3.73 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 673.00 in SunOpta on September 14, 2024 and sell it today you would earn a total of 89.00 from holding SunOpta or generate 13.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
SunOpta vs. Dow Jones Industrial
Performance |
Timeline |
SunOpta and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
SunOpta
Pair trading matchups for SunOpta
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SunOpta and Dow Jones
The main advantage of trading using opposite SunOpta and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Global Correlations Find global opportunities by holding instruments from different markets |