Correlation Between MAS Gold and SunOpta

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

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

Diversification Opportunities for MAS Gold and SunOpta

-0.4

Correlation Coefficient

MAS Gold  SunOpta

Very good diversification

The 3 months correlation between MAS and SunOpta is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding MAS Gold Corp and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and MAS Gold 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 MAS Gold Corp 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 MAS Gold i.e., MAS Gold and SunOpta go up and down completely randomly.

Pair Corralation between MAS Gold and SunOpta

Assuming the 90 days horizon MAS Gold Corp is expected to generate 12.54 times more return on investment than SunOpta. However, MAS Gold is 12.54 times more volatile than SunOpta. It trades about 0.11 of its potential returns per unit of risk. SunOpta is currently generating about 0.17 per unit of risk. If you would invest  2.00  in MAS Gold Corp on September 29, 2024 and sell it today you would lose (1.00) from holding MAS Gold Corp or give up 50.0% of portfolio value over 90 days.

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

MAS Gold Corp  vs.  SunOpta

MAS Gold Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MAS Gold Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, MAS Gold showed solid returns over the last few months and may actually be approaching a breakup point.

SunOpta

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, SunOpta displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MAS Gold and SunOpta

The main advantage of trading using opposite MAS Gold and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAS Gold 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 MAS Gold Corp 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.