Correlation Between Canaf Investments and Sun Life
Can any of the company-specific risk be diversified away by investing in both Canaf Investments 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 Canaf Investments and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Sun Life Non, you can compare the effects of market volatilities on Canaf Investments 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 Canaf Investments with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Sun Life.
Diversification Opportunities for Canaf Investments and Sun Life
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canaf and Sun is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Sun Life Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Non and Canaf Investments 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 Canaf Investments 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 Non has no effect on the direction of Canaf Investments i.e., Canaf Investments and Sun Life go up and down completely randomly.
Pair Corralation between Canaf Investments and Sun Life
Assuming the 90 days horizon Canaf Investments is expected to under-perform the Sun Life. In addition to that, Canaf Investments is 7.11 times more volatile than Sun Life Non. It trades about -0.1 of its total potential returns per unit of risk. Sun Life Non is currently generating about 0.3 per unit of volatility. If you would invest 1,590 in Sun Life Non on September 14, 2024 and sell it today you would earn a total of 56.00 from holding Sun Life Non or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaf Investments vs. Sun Life Non
Performance |
| Timeline |
| Canaf Investments |
| Sun Life Non |
Canaf Investments and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Sun Life
The main advantage of trading using opposite Canaf Investments and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments 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.| Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Orezone Gold Corp | Canaf Investments vs. Faraday Copper Corp |
| Sun Life vs. Westshore Terminals Investment | Sun Life vs. Canaf Investments | Sun Life vs. Highwood Asset Management | Sun Life vs. Canso Credit Trust |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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