Correlation Between BTU Metals and Sun Life
Can any of the company-specific risk be diversified away by investing in both BTU Metals and Sun Life 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 BTU Metals and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTU Metals Corp and Sun Life Financial, you can compare the effects of market volatilities on BTU Metals and Sun Life 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 BTU Metals with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Sun Life.
Diversification Opportunities for BTU Metals and Sun Life
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BTU and Sun is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial and BTU Metals 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 BTU Metals Corp are associated (or correlated) with Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of BTU Metals i.e., BTU Metals and Sun Life go up and down completely randomly.
Pair Corralation between BTU Metals and Sun Life
Assuming the 90 days horizon BTU Metals Corp is expected to generate 7.62 times more return on investment than Sun Life. However, BTU Metals is 7.62 times more volatile than Sun Life Financial. It trades about 0.03 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.09 per unit of risk. If you would invest 2.07 in BTU Metals Corp on September 1, 2024 and sell it today you would lose (0.02) from holding BTU Metals Corp or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
BTU Metals Corp vs. Sun Life Financial
Performance |
| Timeline |
| BTU Metals Corp |
| Sun Life Financial |
BTU Metals and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Sun Life
The main advantage of trading using opposite BTU Metals and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| BTU Metals vs. Alaska Air Group | BTU Metals vs. Xtant Medical Holdings | BTU Metals vs. Westinghouse Air Brake | BTU Metals vs. AerSale Corp |
| Sun Life vs. Hartford Financial Services | Sun Life vs. Goosehead Insurance | Sun Life vs. International General Insurance | Sun Life vs. Enstar Group Limited |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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