Correlation Between Sun Life and Secure Energy
Can any of the company-specific risk be diversified away by investing in both Sun Life and Secure 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 Secure 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 Secure Energy Services, you can compare the effects of market volatilities on Sun Life and Secure 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 Secure Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Secure Energy.
Diversification Opportunities for Sun Life and Secure Energy
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and Secure is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Secure Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure 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 Secure Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Energy Services has no effect on the direction of Sun Life i.e., Sun Life and Secure Energy go up and down completely randomly.
Pair Corralation between Sun Life and Secure Energy
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 0.8 times more return on investment than Secure Energy. However, Sun Life Financial is 1.25 times less risky than Secure Energy. It trades about -0.05 of its potential returns per unit of risk. Secure Energy Services is currently generating about -0.06 per unit of risk. If you would invest 2,025 in Sun Life Financial on September 3, 2024 and sell it today you would lose (20.00) from holding Sun Life Financial or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Secure Energy Services
Performance |
| Timeline |
| Sun Life Financial |
| Secure Energy Services |
Sun Life and Secure Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Secure Energy
The main advantage of trading using opposite Sun Life and Secure Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Secure 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 Secure Energy will offset losses from the drop in Secure Energy's long position.| Sun Life vs. Sun Life Non | Sun Life vs. Sun Life Financial | Sun Life vs. BMO Aggregate Bond | Sun Life vs. Terreno Resources Corp |
| Secure Energy vs. CES Energy Solutions | Secure Energy vs. Ensign Energy Services | Secure Energy vs. Enerflex | Secure Energy vs. Pason Systems |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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