Correlation Between Canso Credit and Sun Life
Can any of the company-specific risk be diversified away by investing in both Canso Credit 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 Canso Credit and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canso Credit Trust and Sun Life Non, you can compare the effects of market volatilities on Canso Credit 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 Canso Credit with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canso Credit and Sun Life.
Diversification Opportunities for Canso Credit and Sun Life
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canso and Sun is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Canso Credit Trust and Sun Life Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Non and Canso Credit 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 Canso Credit Trust 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 Non has no effect on the direction of Canso Credit i.e., Canso Credit and Sun Life go up and down completely randomly.
Pair Corralation between Canso Credit and Sun Life
Assuming the 90 days trading horizon Canso Credit Trust is expected to generate 0.64 times more return on investment than Sun Life. However, Canso Credit Trust is 1.56 times less risky than Sun Life. It trades about 0.48 of its potential returns per unit of risk. Sun Life Non is currently generating about 0.3 per unit of risk. If you would invest 1,523 in Canso Credit Trust on September 14, 2024 and sell it today you would earn a total of 55.00 from holding Canso Credit Trust or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canso Credit Trust vs. Sun Life Non
Performance |
| Timeline |
| Canso Credit Trust |
| Sun Life Non |
Canso Credit and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canso Credit and Sun Life
The main advantage of trading using opposite Canso Credit and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canso Credit 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.| Canso Credit vs. MINT Income Fund | Canso Credit vs. Canadian High Income | Canso Credit vs. Blue Ribbon Income | Canso Credit vs. Australian REIT Income |
| Sun Life vs. Westshore Terminals Investment | Sun Life vs. Canaf Investments | Sun Life vs. Highwood Asset Management | Sun Life vs. Canso Credit Trust |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |