Correlation Between Miniso Group and SunOpta

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

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

Diversification Opportunities for Miniso Group and SunOpta

-0.53

Correlation Coefficient

Miniso Group  SunOpta

Excellent diversification

The 3 months correlation between Miniso and SunOpta is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Miniso Group HoldingLtd and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Miniso Group 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 Miniso Group HoldingLtd 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 Miniso Group i.e., Miniso Group and SunOpta go up and down completely randomly.

Pair Corralation between Miniso Group and SunOpta

Given the investment horizon of 90 days Miniso Group HoldingLtd is expected to generate 0.92 times more return on investment than SunOpta. However, Miniso Group HoldingLtd is 1.08 times less risky than SunOpta. It trades about 0.12 of its potential returns per unit of risk. SunOpta is currently generating about -0.05 per unit of risk. If you would invest  1,812  in Miniso Group HoldingLtd on February 24, 2024 and sell it today you would earn a total of  423.00  from holding Miniso Group HoldingLtd or generate 23.34% return on investment over 90 days.

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

Miniso Group HoldingLtd  vs.  SunOpta

Miniso Group HoldingLtd

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group HoldingLtd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

SunOpta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SunOpta has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Miniso Group and SunOpta

The main advantage of trading using opposite Miniso Group and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miniso Group 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 Miniso Group HoldingLtd 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.