Correlation Between Chorus Aviation and Sun Life
Can any of the company-specific risk be diversified away by investing in both Chorus Aviation 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 Chorus Aviation and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chorus Aviation and Sun Life Financial, you can compare the effects of market volatilities on Chorus Aviation 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 Chorus Aviation with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chorus Aviation and Sun Life.
Diversification Opportunities for Chorus Aviation and Sun Life
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chorus and Sun is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chorus Aviation 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 Chorus Aviation 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 Chorus Aviation 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 Chorus Aviation i.e., Chorus Aviation and Sun Life go up and down completely randomly.
Pair Corralation between Chorus Aviation and Sun Life
Assuming the 90 days trading horizon Chorus Aviation is expected to generate 3.93 times more return on investment than Sun Life. However, Chorus Aviation is 3.93 times more volatile than Sun Life Financial. It trades about 0.22 of its potential returns per unit of risk. Sun Life Financial is currently generating about -0.08 per unit of risk. If you would invest 296.00 in Chorus Aviation on August 30, 2024 and sell it today you would earn a total of 37.00 from holding Chorus Aviation or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chorus Aviation vs. Sun Life Financial
Performance |
| Timeline |
| Chorus Aviation |
| Sun Life Financial |
Chorus Aviation and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chorus Aviation and Sun Life
The main advantage of trading using opposite Chorus Aviation and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chorus Aviation 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.| Chorus Aviation vs. Cargojet | Chorus Aviation vs. Exchange Income | Chorus Aviation vs. Cineplex | Chorus Aviation vs. Transat AT |
| Sun Life vs. Sun Life Financial | Sun Life vs. Sun Life Financial | Sun Life vs. Sun Lif Non | 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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