Correlation Between SunOpta and Fly E

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

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

Diversification Opportunities for SunOpta and Fly E

-0.75

Correlation Coefficient

SunOpta  Fly E

Pay attention - limited upside

The 3 months correlation between SunOpta and Fly is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Fly E Group, Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fly E Group, 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 Fly E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fly E Group, has no effect on the direction of SunOpta i.e., SunOpta and Fly E go up and down completely randomly.

Pair Corralation between SunOpta and Fly E

Given the investment horizon of 90 days SunOpta is expected to generate 4.77 times less return on investment than Fly E. But when comparing it to its historical volatility, SunOpta is 3.79 times less risky than Fly E. It trades about 0.02 of its potential returns per unit of risk. Fly E Group, Common is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  44.00  in Fly E Group, Common on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Fly E Group, Common or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SunOpta  vs.  Fly E Group, Common

SunOpta

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 9 (%) 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.

Fly E Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fly E Group, Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with SunOpta and Fly E

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

The idea behind SunOpta and Fly E Group, Common 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.