Correlation Between Kinaxis and SunOpta

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

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

Diversification Opportunities for Kinaxis and SunOpta

0.73

Correlation Coefficient

Kinaxis  SunOpta

Poor diversification

The 3 months correlation between Kinaxis and SunOpta is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kinaxis and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Kinaxis 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 Kinaxis 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 Kinaxis i.e., Kinaxis and SunOpta go up and down completely randomly.

Pair Corralation between Kinaxis and SunOpta

Assuming the 90 days trading horizon Kinaxis is expected to generate 0.65 times more return on investment than SunOpta. However, Kinaxis is 1.53 times less risky than SunOpta. It trades about -0.1 of its potential returns per unit of risk. SunOpta is currently generating about -0.26 per unit of risk. If you would invest  17,371  in Kinaxis on December 30, 2024 and sell it today you would lose (1,847) from holding Kinaxis or give up 10.63% of portfolio value over 90 days.

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

Kinaxis  vs.  SunOpta

Kinaxis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinaxis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

SunOpta

Risk-Adjusted Performance

Very Weak

Over the last 90 days SunOpta has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kinaxis and SunOpta

The main advantage of trading using opposite Kinaxis and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinaxis 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 Kinaxis 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.