Correlation Between Sun Life and Helios Fairfax
Can any of the company-specific risk be diversified away by investing in both Sun Life and Helios Fairfax 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 Helios Fairfax 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 Helios Fairfax Partners, you can compare the effects of market volatilities on Sun Life and Helios Fairfax 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 Helios Fairfax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Helios Fairfax.
Diversification Opportunities for Sun Life and Helios Fairfax
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and Helios is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Helios Fairfax Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Fairfax Partners 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 Helios Fairfax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Fairfax Partners has no effect on the direction of Sun Life i.e., Sun Life and Helios Fairfax go up and down completely randomly.
Pair Corralation between Sun Life and Helios Fairfax
Assuming the 90 days trading horizon Sun Life Financial is expected to under-perform the Helios Fairfax. But the preferred stock apears to be less risky and, when comparing its historical volatility, Sun Life Financial is 2.46 times less risky than Helios Fairfax. The preferred stock trades about -0.04 of its potential returns per unit of risk. The Helios Fairfax Partners is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 272.00 in Helios Fairfax Partners on August 31, 2024 and sell it today you would earn a total of 8.00 from holding Helios Fairfax Partners or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Helios Fairfax Partners
Performance |
| Timeline |
| Sun Life Financial |
| Helios Fairfax Partners |
Sun Life and Helios Fairfax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Helios Fairfax
The main advantage of trading using opposite Sun Life and Helios Fairfax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Helios Fairfax 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 Helios Fairfax will offset losses from the drop in Helios Fairfax's long position.| Sun Life vs. Sun Life Non | Sun Life vs. Sun Life Financial | Sun Life vs. Forstrong Global Income | Sun Life vs. BMO Aggregate Bond |
| Helios Fairfax vs. iShares Canadian HYBrid | Helios Fairfax vs. Brompton European Dividend | Helios Fairfax vs. Solar Alliance Energy | Helios Fairfax vs. PHN Multi Style All Cap |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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