Correlation Between SunOpta and Ryman Hospitality

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

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

Diversification Opportunities for SunOpta and Ryman Hospitality

0.62

Correlation Coefficient

SunOpta  Ryman Hospitality

Poor diversification

The 3 months correlation between SunOpta and Ryman is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Ryman Hospitality Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryman Hospitality 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 Ryman Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryman Hospitality has no effect on the direction of SunOpta i.e., SunOpta and Ryman Hospitality go up and down completely randomly.

Pair Corralation between SunOpta and Ryman Hospitality

Given the investment horizon of 90 days SunOpta is expected to generate 2.2 times more return on investment than Ryman Hospitality. However, SunOpta is 2.2 times more volatile than Ryman Hospitality Properties. It trades about 0.06 of its potential returns per unit of risk. Ryman Hospitality Properties is currently generating about 0.0 per unit of risk. If you would invest  547.00  in SunOpta on September 24, 2024 and sell it today you would earn a total of  226.00  from holding SunOpta or generate 41.32% return on investment over 90 days.

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

SunOpta  vs.  Ryman Hospitality Properties

SunOpta

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, SunOpta disclosed solid returns over the last few months and may actually be approaching a breakup point.

Ryman Hospitality

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryman Hospitality Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, Ryman Hospitality is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SunOpta and Ryman Hospitality

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

The idea behind SunOpta and Ryman Hospitality Properties 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.