Correlation Between Indutrade and Sun Life
Can any of the company-specific risk be diversified away by investing in both Indutrade 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 Indutrade and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and Sun Life Financial, you can compare the effects of market volatilities on Indutrade 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 Indutrade with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Sun Life.
Diversification Opportunities for Indutrade and Sun Life
Excellent diversification
The 3 months correlation between Indutrade and Sun is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB 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 Indutrade 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 Indutrade AB 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 Indutrade i.e., Indutrade and Sun Life go up and down completely randomly.
Pair Corralation between Indutrade and Sun Life
Assuming the 90 days horizon Indutrade AB is expected to generate 1.82 times more return on investment than Sun Life. However, Indutrade is 1.82 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 1,617 in Indutrade AB on October 18, 2024 and sell it today you would earn a total of 777.00 from holding Indutrade AB or generate 48.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indutrade AB vs. Sun Life Financial
Performance |
| Timeline |
| Indutrade AB |
| Sun Life Financial |
Indutrade and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and Sun Life
The main advantage of trading using opposite Indutrade and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade 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.| Indutrade vs. SENECA FOODS A | Indutrade vs. Webster Financial | Indutrade vs. Virtu Financial | Indutrade vs. Lifeway Foods |
| Sun Life vs. SALESFORCE INC CDR | Sun Life vs. Indutrade AB | Sun Life vs. FIREWEED METALS P | Sun Life vs. FAST RETAIL ADR |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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