Correlation Between Sprott Physical and Sun Life
Can any of the company-specific risk be diversified away by investing in both Sprott Physical 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 Sprott Physical and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Physical Gold and Sun Life Financial, you can compare the effects of market volatilities on Sprott Physical 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 Sprott Physical with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Sun Life.
Diversification Opportunities for Sprott Physical and Sun Life
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sprott and Sun is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold 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 Sprott Physical 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 Sprott Physical Gold 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 Sprott Physical i.e., Sprott Physical and Sun Life go up and down completely randomly.
Pair Corralation between Sprott Physical and Sun Life
Assuming the 90 days trading horizon Sprott Physical Gold is expected to generate 5.14 times more return on investment than Sun Life. However, Sprott Physical is 5.14 times more volatile than Sun Life Financial. It trades about 0.05 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.06 per unit of risk. If you would invest 2,504 in Sprott Physical Gold on September 3, 2024 and sell it today you would earn a total of 928.00 from holding Sprott Physical Gold or generate 37.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Physical Gold vs. Sun Life Financial
Performance |
| Timeline |
| Sprott Physical Gold |
| Sun Life Financial |
Sprott Physical and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Physical and Sun Life
The main advantage of trading using opposite Sprott Physical and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical 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.| Sprott Physical vs. Colliers International Group | Sprott Physical vs. Altus Group Limited | Sprott Physical vs. Harvest Global REIT | Sprott Physical vs. International Zeolite Corp |
| Sun Life vs. Definity Financial Corp | Sun Life vs. Information Services | Sun Life vs. CI Financial Corp | Sun Life vs. iA Financial |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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