Correlation Between Canlan Ice and Sun Lif
Can any of the company-specific risk be diversified away by investing in both Canlan Ice 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 Canlan Ice and Sun Lif into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Sun Lif Non, you can compare the effects of market volatilities on Canlan Ice 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 Canlan Ice with a short position of Sun Lif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Sun Lif.
Diversification Opportunities for Canlan Ice and Sun Lif
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canlan and Sun is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports 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 Canlan Ice 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 Canlan Ice Sports 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 Canlan Ice i.e., Canlan Ice and Sun Lif go up and down completely randomly.
Pair Corralation between Canlan Ice and Sun Lif
Assuming the 90 days trading horizon Canlan Ice Sports is expected to generate 1.4 times more return on investment than Sun Lif. However, Canlan Ice is 1.4 times more volatile than Sun Lif Non. It trades about 0.04 of its potential returns per unit of risk. Sun Lif Non is currently generating about -0.01 per unit of risk. If you would invest 380.00 in Canlan Ice Sports on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Canlan Ice Sports or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Sun Lif Non
Performance |
| Timeline |
| Canlan Ice Sports |
| Sun Lif Non |
Canlan Ice and Sun Lif Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Sun Lif
The main advantage of trading using opposite Canlan Ice and Sun Lif positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice 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.| Canlan Ice vs. BMTC Group | Canlan Ice vs. Caldwell Partners International | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Madison Pacific Properties |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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