Correlation Between Capital Clean and Sun Life
Can any of the company-specific risk be diversified away by investing in both Capital Clean 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 Capital Clean and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Clean Energy and Sun Life Financial, you can compare the effects of market volatilities on Capital Clean 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 Capital Clean with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and Sun Life.
Diversification Opportunities for Capital Clean and Sun Life
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capital and Sun is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy 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 Capital Clean 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 Capital Clean Energy 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 Capital Clean i.e., Capital Clean and Sun Life go up and down completely randomly.
Pair Corralation between Capital Clean and Sun Life
Given the investment horizon of 90 days Capital Clean Energy is expected to under-perform the Sun Life. In addition to that, Capital Clean is 1.33 times more volatile than Sun Life Financial. It trades about -0.12 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.34 per unit of volatility. If you would invest 5,600 in Sun Life Financial on August 31, 2024 and sell it today you would earn a total of 492.00 from holding Sun Life Financial or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Clean Energy vs. Sun Life Financial
Performance |
| Timeline |
| Capital Clean Energy |
| Sun Life Financial |
Capital Clean and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Clean and Sun Life
The main advantage of trading using opposite Capital Clean and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Clean 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.| Capital Clean vs. Mink Therapeutics | Capital Clean vs. EvoAir Holdings | Capital Clean vs. Mind Medicine | Capital Clean vs. Westinghouse Air Brake |
| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Hartford Financial Services | Sun Life vs. Goosehead Insurance |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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