Correlation Between Albertsons Companies and SunOpta
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies 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 Albertsons Companies and SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and SunOpta, you can compare the effects of market volatilities on Albertsons Companies 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 Albertsons Companies with a short position of SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and SunOpta.
Diversification Opportunities for Albertsons Companies and SunOpta
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Albertsons and SunOpta is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Albertsons Companies 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 Albertsons Companies 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 Albertsons Companies i.e., Albertsons Companies and SunOpta go up and down completely randomly.
Pair Corralation between Albertsons Companies and SunOpta
Considering the 90-day investment horizon Albertsons Companies is expected to generate 0.25 times more return on investment than SunOpta. However, Albertsons Companies is 3.96 times less risky than SunOpta. It trades about 0.07 of its potential returns per unit of risk. SunOpta is currently generating about -0.05 per unit of risk. If you would invest 2,000 in Albertsons Companies on March 4, 2024 and sell it today you would earn a total of 64.00 from holding Albertsons Companies or generate 3.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Albertsons Companies vs. SunOpta
Performance |
Timeline |
Albertsons Companies |
SunOpta |
Albertsons Companies and SunOpta Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Albertsons Companies and SunOpta
The main advantage of trading using opposite Albertsons Companies and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies 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.Albertsons Companies vs. Sprouts Farmers Market | Albertsons Companies vs. Krispy Kreme | Albertsons Companies vs. Grocery Outlet Holding | Albertsons Companies vs. Weis Markets |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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