Correlation Between KFT and SunOpta

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

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

Diversification Opportunities for KFT and SunOpta

0.0

Correlation Coefficient

KFT  SunOpta

Pay attention - limited upside

The 3 months correlation between KFT and SunOpta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KFT and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and KFT 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 KFT are associated (or correlated) with SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of KFT i.e., KFT and SunOpta go up and down completely randomly.

Pair Corralation between KFT and SunOpta

If you would invest (100.00) in KFT on February 2, 2024 and sell it today you would earn a total of  100.00  from holding KFT or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

KFT  vs.  SunOpta

KFT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KFT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, KFT is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

SunOpta

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days SunOpta has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, SunOpta 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 KFT and SunOpta

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

The idea behind KFT and SunOpta 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.