Correlation Between Fair Isaac and SunOpta

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

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

Diversification Opportunities for Fair Isaac and SunOpta

0.48

Correlation Coefficient

Fair Isaac  SunOpta

Very weak diversification

The 3 months correlation between Fair and SunOpta is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Fair Isaac 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 Fair Isaac 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 Fair Isaac i.e., Fair Isaac and SunOpta go up and down completely randomly.

Pair Corralation between Fair Isaac and SunOpta

Given the investment horizon of 90 days Fair Isaac is expected to under-perform the SunOpta. In addition to that, Fair Isaac is 1.09 times more volatile than SunOpta. It trades about -0.32 of its total potential returns per unit of risk. SunOpta is currently generating about -0.09 per unit of volatility. If you would invest  772.00  in SunOpta on October 25, 2024 and sell it today you would lose (47.00) from holding SunOpta or give up 6.09% of portfolio value over 90 days.

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

Fair Isaac  vs.  SunOpta

Fair Isaac

Risk-Adjusted Performance

0 of 100

Very Weak

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

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. 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 Fair Isaac and SunOpta

The main advantage of trading using opposite Fair Isaac and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fair Isaac 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 Fair Isaac 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.