Correlation Between SunOpta and KINDER

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

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

Diversification Opportunities for SunOpta and KINDER

0.08

Correlation Coefficient

SunOpta  KINDER

Significant diversification

The 3 months correlation between SunOpta and KINDER is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and KINDER MORGAN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINDER MORGAN INC 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 KINDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINDER MORGAN INC has no effect on the direction of SunOpta i.e., SunOpta and KINDER go up and down completely randomly.

Pair Corralation between SunOpta and KINDER

Given the investment horizon of 90 days SunOpta is expected to generate 18.08 times more return on investment than KINDER. However, SunOpta is 18.08 times more volatile than KINDER MORGAN INC. It trades about 0.16 of its potential returns per unit of risk. KINDER MORGAN INC is currently generating about -0.07 per unit of risk. If you would invest  576.00  in SunOpta on October 25, 2024 and sell it today you would earn a total of  143.00  from holding SunOpta or generate 24.83% return on investment over 90 days.

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

SunOpta  vs.  KINDER MORGAN INC

SunOpta

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 12 (%) 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.

KINDER MORGAN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KINDER MORGAN INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KINDER is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SunOpta and KINDER

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

The idea behind SunOpta and KINDER MORGAN INC 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.