Correlation Between Leons Furniture and Sun Lif
Can any of the company-specific risk be diversified away by investing in both Leons Furniture 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 Leons Furniture and Sun Lif into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leons Furniture Limited and Sun Lif Non, you can compare the effects of market volatilities on Leons Furniture 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 Leons Furniture with a short position of Sun Lif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leons Furniture and Sun Lif.
Diversification Opportunities for Leons Furniture and Sun Lif
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Leons and Sun is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Leons Furniture Limited 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 Leons Furniture 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 Leons Furniture Limited 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 Leons Furniture i.e., Leons Furniture and Sun Lif go up and down completely randomly.
Pair Corralation between Leons Furniture and Sun Lif
Assuming the 90 days trading horizon Leons Furniture Limited is expected to generate 1.6 times more return on investment than Sun Lif. However, Leons Furniture is 1.6 times more volatile than Sun Lif Non. It trades about 0.1 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 2,182 in Leons Furniture Limited on September 1, 2024 and sell it today you would earn a total of 530.00 from holding Leons Furniture Limited or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leons Furniture Limited vs. Sun Lif Non
Performance |
| Timeline |
| Leons Furniture |
| Sun Lif Non |
Leons Furniture and Sun Lif Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leons Furniture and Sun Lif
The main advantage of trading using opposite Leons Furniture and Sun Lif positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leons Furniture 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.| Leons Furniture vs. High Liner Foods | Leons Furniture vs. Richelieu Hardware | Leons Furniture vs. North West | Leons Furniture vs. Toromont Industries |
| Sun Lif vs. A W FOOD | Sun Lif vs. Canlan Ice Sports | Sun Lif vs. HOME DEPOT CDR | Sun Lif vs. Dream Office Real |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |