Correlation Between SunOpta and Winpak

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

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

Diversification Opportunities for SunOpta and Winpak

0.9

Correlation Coefficient

SunOpta  Winpak

Almost no diversification

The 3 months correlation between SunOpta and Winpak is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Winpak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winpak and SunOpta 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 SunOpta are associated (or correlated) with Winpak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winpak has no effect on the direction of SunOpta i.e., SunOpta and Winpak go up and down completely randomly.

Pair Corralation between SunOpta and Winpak

Assuming the 90 days trading horizon SunOpta is expected to under-perform the Winpak. In addition to that, SunOpta is 1.96 times more volatile than Winpak. It trades about -0.27 of its total potential returns per unit of risk. Winpak is currently generating about -0.16 per unit of volatility. If you would invest  4,517  in Winpak on December 27, 2024 and sell it today you would lose (564.00) from holding Winpak or give up 12.49% of portfolio value over 90 days.

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

SunOpta  vs.  Winpak

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.

Winpak

Risk-Adjusted Performance

Very Weak

Over the last 90 days Winpak has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's forward-looking signals 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 SunOpta and Winpak

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

The idea behind SunOpta and Winpak 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.