Correlation Between Knight Therapeutics and Sun Life
Can any of the company-specific risk be diversified away by investing in both Knight Therapeutics 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 Knight Therapeutics and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Therapeutics and Sun Life Financial, you can compare the effects of market volatilities on Knight Therapeutics 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 Knight Therapeutics with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Therapeutics and Sun Life.
Diversification Opportunities for Knight Therapeutics and Sun Life
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Knight and Sun is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Knight Therapeutics 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 Knight Therapeutics 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 Knight Therapeutics 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 Knight Therapeutics i.e., Knight Therapeutics and Sun Life go up and down completely randomly.
Pair Corralation between Knight Therapeutics and Sun Life
Assuming the 90 days trading horizon Knight Therapeutics is expected to generate 1.46 times more return on investment than Sun Life. However, Knight Therapeutics is 1.46 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 0.0 per unit of risk. If you would invest 523.00 in Knight Therapeutics on October 22, 2024 and sell it today you would earn a total of 25.00 from holding Knight Therapeutics or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knight Therapeutics vs. Sun Life Financial
Performance |
| Timeline |
| Knight Therapeutics |
| Sun Life Financial |
Knight Therapeutics and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Therapeutics and Sun Life
The main advantage of trading using opposite Knight Therapeutics and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Therapeutics 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.| Knight Therapeutics vs. Stella Jones | Knight Therapeutics vs. Richelieu Hardware | Knight Therapeutics vs. Element Fleet Management | Knight Therapeutics vs. ECN Capital Corp |
| Sun Life vs. Manulife Financial Corp | Sun Life vs. Great West Lifeco | Sun Life vs. National Bank of | Sun Life vs. Canadian Imperial Bank |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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