Correlation Between Sun Life and Ensign Energy
Can any of the company-specific risk be diversified away by investing in both Sun Life and Ensign Energy 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 Sun Life and Ensign Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Life Financial and Ensign Energy Services, you can compare the effects of market volatilities on Sun Life and Ensign Energy 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 Sun Life with a short position of Ensign Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Ensign Energy.
Diversification Opportunities for Sun Life and Ensign Energy
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and Ensign is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Ensign Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Energy Services and Sun Life 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 Sun Life Financial are associated (or correlated) with Ensign Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Energy Services has no effect on the direction of Sun Life i.e., Sun Life and Ensign Energy go up and down completely randomly.
Pair Corralation between Sun Life and Ensign Energy
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 0.27 times more return on investment than Ensign Energy. However, Sun Life Financial is 3.76 times less risky than Ensign Energy. It trades about 0.03 of its potential returns per unit of risk. Ensign Energy Services is currently generating about 0.0 per unit of risk. If you would invest 1,793 in Sun Life Financial on September 4, 2024 and sell it today you would earn a total of 212.00 from holding Sun Life Financial or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sun Life Financial vs. Ensign Energy Services
Performance |
| Timeline |
| Sun Life Financial |
| Ensign Energy Services |
Sun Life and Ensign Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Ensign Energy
The main advantage of trading using opposite Sun Life and Ensign Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Ensign Energy 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 Ensign Energy will offset losses from the drop in Ensign Energy's long position.| Sun Life vs. Thunderbird Entertainment Group | Sun Life vs. Chemtrade Logistics Income | Sun Life vs. Highwood Asset Management | Sun Life vs. Postmedia Network Canada |
| Ensign Energy vs. Precision Drilling | Ensign Energy vs. Trican Well Service | Ensign Energy vs. Calfrac Well Services | Ensign Energy vs. NuVista Energy |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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