Correlation Between Northview Residential and Sun Life
Can any of the company-specific risk be diversified away by investing in both Northview Residential 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 Northview Residential and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northview Residential REIT and Sun Life Financial, you can compare the effects of market volatilities on Northview Residential 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 Northview Residential with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northview Residential and Sun Life.
Diversification Opportunities for Northview Residential and Sun Life
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northview and Sun is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Northview Residential REIT 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 Northview Residential 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 Northview Residential REIT 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 Northview Residential i.e., Northview Residential and Sun Life go up and down completely randomly.
Pair Corralation between Northview Residential and Sun Life
Assuming the 90 days trading horizon Northview Residential is expected to generate 5.48 times less return on investment than Sun Life. In addition to that, Northview Residential is 2.22 times more volatile than Sun Life Financial. It trades about 0.04 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.53 per unit of volatility. If you would invest 7,645 in Sun Life Financial on September 1, 2024 and sell it today you would earn a total of 972.00 from holding Sun Life Financial or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northview Residential REIT vs. Sun Life Financial
Performance |
| Timeline |
| Northview Residential |
| Sun Life Financial |
Northview Residential and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northview Residential and Sun Life
The main advantage of trading using opposite Northview Residential and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northview Residential 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.| Northview Residential vs. Economic Investment Trust | Northview Residential vs. Canaf Investments | Northview Residential vs. Constellation Software | Northview Residential vs. Westshore Terminals Investment |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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