Correlation Between Atmus Filtration and SunOpta

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

By analyzing existing cross correlation between Atmus Filtration Technologies and SunOpta, you can compare the effects of market volatilities on Atmus Filtration and SunOpta 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 Atmus Filtration with a short position of SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmus Filtration and SunOpta.

Diversification Opportunities for Atmus Filtration and SunOpta

0.53

Correlation Coefficient

Atmus Filtration  SunOpta

Very weak diversification

The 3 months correlation between Atmus and SunOpta is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Atmus Filtration Technologies and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Atmus Filtration 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 Atmus Filtration Technologies are associated (or correlated) with SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Atmus Filtration i.e., Atmus Filtration and SunOpta go up and down completely randomly.

Pair Corralation between Atmus Filtration and SunOpta

Given the investment horizon of 90 days Atmus Filtration Technologies is expected to generate 0.45 times more return on investment than SunOpta. However, Atmus Filtration Technologies is 2.2 times less risky than SunOpta. It trades about -0.17 of its potential returns per unit of risk. SunOpta is currently generating about -0.16 per unit of risk. If you would invest  4,078  in Atmus Filtration Technologies on October 11, 2024 and sell it today you would lose (138.00) from holding Atmus Filtration Technologies or give up 3.38% of portfolio value over 90 days.

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

Atmus Filtration Technologies  vs.  SunOpta

Atmus Filtration Tec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atmus Filtration Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Atmus Filtration is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

SunOpta

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 7 (%) 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.

Pair Trading with Atmus Filtration and SunOpta

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

The idea behind Atmus Filtration Technologies and SunOpta 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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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.