Correlation Between SunOpta and Element Global

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

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

Diversification Opportunities for SunOpta and Element Global

0.01

Correlation Coefficient

SunOpta  Element Global

Significant diversification

The 3 months correlation between SunOpta and Element is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Element Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Global 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 Element Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Global has no effect on the direction of SunOpta i.e., SunOpta and Element Global go up and down completely randomly.

Pair Corralation between SunOpta and Element Global

If you would invest  0.01  in Element Global on December 28, 2024 and sell it today you would lose  0.00  from holding Element Global or give up 0.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

SunOpta  vs.  Element Global

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. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Element Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Element Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Element Global is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with SunOpta and Element Global

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

The idea behind SunOpta and Element Global 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.