Correlation Between Sun Life and PENINSULA ENERG
Can any of the company-specific risk be diversified away by investing in both Sun Life and PENINSULA ENERG 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 Sun Life and PENINSULA ENERG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Life Financial and PENINSULA ENERG, you can compare the effects of market volatilities on Sun Life and PENINSULA ENERG 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 Sun Life with a short position of PENINSULA ENERG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and PENINSULA ENERG.
Diversification Opportunities for Sun Life and PENINSULA ENERG
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and PENINSULA is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and PENINSULA ENERG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENINSULA ENERG and Sun Life 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 Sun Life Financial are associated (or correlated) with PENINSULA ENERG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENINSULA ENERG has no effect on the direction of Sun Life i.e., Sun Life and PENINSULA ENERG go up and down completely randomly.
Pair Corralation between Sun Life and PENINSULA ENERG
Assuming the 90 days horizon Sun Life Financial is expected to under-perform the PENINSULA ENERG. But the stock apears to be less risky and, when comparing its historical volatility, Sun Life Financial is 6.25 times less risky than PENINSULA ENERG. The stock trades about -0.2 of its potential returns per unit of risk. The PENINSULA ENERG is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 72.00 in PENINSULA ENERG on September 25, 2024 and sell it today you would lose (1.00) from holding PENINSULA ENERG or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. PENINSULA ENERG
Performance |
| Timeline |
| Sun Life Financial |
| PENINSULA ENERG |
Sun Life and PENINSULA ENERG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and PENINSULA ENERG
The main advantage of trading using opposite Sun Life and PENINSULA ENERG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, PENINSULA ENERG 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 PENINSULA ENERG will offset losses from the drop in PENINSULA ENERG's long position.| Sun Life vs. Berkshire Hathaway | Sun Life vs. Berkshire Hathaway | Sun Life vs. Zurich Insurance Group | Sun Life vs. American International Group |
| PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Microsoft | PENINSULA ENERG vs. Microsoft |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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