Correlation Between Ramp Metals and Sun Life
Can any of the company-specific risk be diversified away by investing in both Ramp Metals 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 Ramp Metals and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramp Metals and Sun Life Financial, you can compare the effects of market volatilities on Ramp Metals 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 Ramp Metals with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramp Metals and Sun Life.
Diversification Opportunities for Ramp Metals and Sun Life
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ramp and Sun is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ramp Metals 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 Ramp Metals 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 Ramp Metals 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 Ramp Metals i.e., Ramp Metals and Sun Life go up and down completely randomly.
Pair Corralation between Ramp Metals and Sun Life
Assuming the 90 days trading horizon Ramp Metals is expected to under-perform the Sun Life. In addition to that, Ramp Metals is 3.32 times more volatile than Sun Life Financial. It trades about -0.1 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.11 per unit of volatility. If you would invest 1,600 in Sun Life Financial on September 2, 2024 and sell it today you would earn a total of 43.00 from holding Sun Life Financial or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramp Metals vs. Sun Life Financial
Performance |
| Timeline |
| Ramp Metals |
| Sun Life Financial |
Ramp Metals and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramp Metals and Sun Life
The main advantage of trading using opposite Ramp Metals and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramp Metals 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.| Ramp Metals vs. Teck Resources Limited | Ramp Metals vs. Ivanhoe Mines | Ramp Metals vs. Filo Mining Corp | Ramp Metals vs. Sigma Lithium Resources |
| Sun Life vs. InPlay Oil Corp | Sun Life vs. Maple Leaf Foods | Sun Life vs. Perseus Mining | Sun Life vs. Ramp Metals |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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