Correlation Between SunOpta and Steakholder Foods

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

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

Diversification Opportunities for SunOpta and Steakholder Foods

-0.84

Correlation Coefficient

SunOpta  Steakholder Foods

Pay attention - limited upside

The 3 months correlation between SunOpta and Steakholder is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Steakholder Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steakholder Foods 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 Steakholder Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steakholder Foods has no effect on the direction of SunOpta i.e., SunOpta and Steakholder Foods go up and down completely randomly.

Pair Corralation between SunOpta and Steakholder Foods

Given the investment horizon of 90 days SunOpta is expected to generate 0.74 times more return on investment than Steakholder Foods. However, SunOpta is 1.35 times less risky than Steakholder Foods. It trades about 0.1 of its potential returns per unit of risk. Steakholder Foods is currently generating about -0.12 per unit of risk. If you would invest  547.00  in SunOpta on September 30, 2024 and sell it today you would earn a total of  234.00  from holding SunOpta or generate 42.78% return on investment over 90 days.

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

SunOpta  vs.  Steakholder Foods

SunOpta

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 10 (%) 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.

Steakholder Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Steakholder Foods 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 fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with SunOpta and Steakholder Foods

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

The idea behind SunOpta and Steakholder Foods 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.