Correlation Between Precision Drilling and Sun Life
Can any of the company-specific risk be diversified away by investing in both Precision Drilling 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 Precision Drilling and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision Drilling and Sun Life Financial, you can compare the effects of market volatilities on Precision Drilling 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 Precision Drilling with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision Drilling and Sun Life.
Diversification Opportunities for Precision Drilling and Sun Life
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Precision and Sun is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Precision Drilling 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 Precision Drilling 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 Precision Drilling 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 Precision Drilling i.e., Precision Drilling and Sun Life go up and down completely randomly.
Pair Corralation between Precision Drilling and Sun Life
Assuming the 90 days horizon Precision Drilling is expected to generate 38.77 times less return on investment than Sun Life. In addition to that, Precision Drilling is 3.2 times more volatile than Sun Life Financial. It trades about 0.0 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.07 per unit of volatility. If you would invest 1,623 in Sun Life Financial on September 14, 2024 and sell it today you would earn a total of 429.00 from holding Sun Life Financial or generate 26.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Precision Drilling vs. Sun Life Financial
Performance |
| Timeline |
| Precision Drilling |
| Sun Life Financial |
Precision Drilling and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision Drilling and Sun Life
The main advantage of trading using opposite Precision Drilling and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Drilling 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.| Precision Drilling vs. Trican Well Service | Precision Drilling vs. Ensign Energy Services | Precision Drilling vs. Calfrac Well Services | Precision Drilling vs. Birchcliff Energy |
| Sun Life vs. Canlan Ice Sports | Sun Life vs. Precision Drilling | Sun Life vs. Nova Leap Health | Sun Life vs. NeuPath Health |
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.
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