Correlation Between SunOpta and ALLTEL

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

By analyzing existing cross correlation between SunOpta and ALLTEL P 68, you can compare the effects of market volatilities on SunOpta and ALLTEL 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 ALLTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and ALLTEL.

Diversification Opportunities for SunOpta and ALLTEL

0.35

Correlation Coefficient

SunOpta  ALLTEL

Weak diversification

The 3 months correlation between SunOpta and ALLTEL is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and ALLTEL P 68 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLTEL P 68 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 ALLTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLTEL P 68 has no effect on the direction of SunOpta i.e., SunOpta and ALLTEL go up and down completely randomly.

Pair Corralation between SunOpta and ALLTEL

Given the investment horizon of 90 days SunOpta is expected to generate 1.59 times more return on investment than ALLTEL. However, SunOpta is 1.59 times more volatile than ALLTEL P 68. It trades about 0.18 of its potential returns per unit of risk. ALLTEL P 68 is currently generating about 0.03 per unit of risk. If you would invest  605.00  in SunOpta on October 8, 2024 and sell it today you would earn a total of  181.00  from holding SunOpta or generate 29.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	25.81%
Values	Daily Returns

SunOpta  vs.  ALLTEL P 68

SunOpta

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 13 (%) 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.

ALLTEL P 68

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALLTEL P 68 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ALLTEL is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SunOpta and ALLTEL

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

The idea behind SunOpta and ALLTEL P 68 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.

Check out your portfolio center.

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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.