Correlation Between MYT Netherlands and SunOpta

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

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

Diversification Opportunities for MYT Netherlands and SunOpta

0.07

Correlation Coefficient

MYT Netherlands  SunOpta

Significant diversification

The 3 months correlation between MYT and SunOpta is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and MYT Netherlands 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 MYT Netherlands Parent 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 MYT Netherlands i.e., MYT Netherlands and SunOpta go up and down completely randomly.

Pair Corralation between MYT Netherlands and SunOpta

Given the investment horizon of 90 days MYT Netherlands is expected to generate 2.61 times less return on investment than SunOpta. In addition to that, MYT Netherlands is 1.67 times more volatile than SunOpta. It trades about 0.05 of its total potential returns per unit of risk. SunOpta is currently generating about 0.2 per unit of volatility. If you would invest  579.00  in SunOpta on October 7, 2024 and sell it today you would earn a total of  207.00  from holding SunOpta or generate 35.75% return on investment over 90 days.

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

MYT Netherlands Parent  vs.  SunOpta

MYT Netherlands Parent

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, MYT Netherlands may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SunOpta

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile forward-looking signals, SunOpta disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MYT Netherlands and SunOpta

The main advantage of trading using opposite MYT Netherlands and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYT Netherlands 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 MYT Netherlands Parent 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..