Correlation Between CHEVRON CDR and Sun Life
Can any of the company-specific risk be diversified away by investing in both CHEVRON CDR 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 CHEVRON CDR and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHEVRON CDR and Sun Life Financial, you can compare the effects of market volatilities on CHEVRON CDR 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 CHEVRON CDR with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHEVRON CDR and Sun Life.
Diversification Opportunities for CHEVRON CDR and Sun Life
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHEVRON and Sun is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding CHEVRON CDR 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 CHEVRON CDR 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 CHEVRON CDR 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 CHEVRON CDR i.e., CHEVRON CDR and Sun Life go up and down completely randomly.
Pair Corralation between CHEVRON CDR and Sun Life
Assuming the 90 days trading horizon CHEVRON CDR is expected to generate 1.14 times more return on investment than Sun Life. However, CHEVRON CDR is 1.14 times more volatile than Sun Life Financial. It trades about 0.34 of its potential returns per unit of risk. Sun Life Financial is currently generating about -0.01 per unit of risk. If you would invest 2,029 in CHEVRON CDR on September 2, 2024 and sell it today you would earn a total of 158.00 from holding CHEVRON CDR or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHEVRON CDR vs. Sun Life Financial
Performance |
| Timeline |
| CHEVRON CDR |
| Sun Life Financial |
CHEVRON CDR and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHEVRON CDR and Sun Life
The main advantage of trading using opposite CHEVRON CDR and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEVRON CDR 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.| CHEVRON CDR vs. Toronto Dominion Bank | CHEVRON CDR vs. Pembina Pipeline Corp | CHEVRON CDR vs. Canso Credit Trust | CHEVRON CDR vs. HPQ Silicon Resources |
| Sun Life vs. Sun Life Non | Sun Life vs. Forstrong Global Income | Sun Life vs. BMO Aggregate Bond | Sun Life vs. iShares Canadian HYBrid |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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