Correlation Between Canoe EIT and Sun Lif
Can any of the company-specific risk be diversified away by investing in both Canoe EIT and Sun Lif 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 Canoe EIT and Sun Lif into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canoe EIT Income and Sun Lif Non, you can compare the effects of market volatilities on Canoe EIT and Sun Lif 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 Canoe EIT with a short position of Sun Lif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoe EIT and Sun Lif.
Diversification Opportunities for Canoe EIT and Sun Lif
Pay attention - limited upside
The 3 months correlation between Canoe and Sun is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Canoe EIT Income and Sun Lif Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Lif Non and Canoe EIT 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 Canoe EIT Income are associated (or correlated) with Sun Lif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Lif Non has no effect on the direction of Canoe EIT i.e., Canoe EIT and Sun Lif go up and down completely randomly.
Pair Corralation between Canoe EIT and Sun Lif
Assuming the 90 days trading horizon Canoe EIT Income is expected to generate 0.44 times more return on investment than Sun Lif. However, Canoe EIT Income is 2.28 times less risky than Sun Lif. It trades about 0.26 of its potential returns per unit of risk. Sun Lif Non is currently generating about -0.02 per unit of risk. If you would invest 1,329 in Canoe EIT Income on September 1, 2024 and sell it today you would earn a total of 241.00 from holding Canoe EIT Income or generate 18.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canoe EIT Income vs. Sun Lif Non
Performance |
| Timeline |
| Canoe EIT Income |
| Sun Lif Non |
Canoe EIT and Sun Lif Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canoe EIT and Sun Lif
The main advantage of trading using opposite Canoe EIT and Sun Lif positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoe EIT position performs unexpectedly, Sun Lif 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 Lif will offset losses from the drop in Sun Lif's long position.| Canoe EIT vs. Dividend 15 Split | Canoe EIT vs. E Split Corp | Canoe EIT vs. Global Dividend Growth | Canoe EIT vs. Dividend Growth Split |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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