Correlation Between Sun Life and AuQ Gold
Can any of the company-specific risk be diversified away by investing in both Sun Life and AuQ Gold 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 AuQ Gold 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 AuQ Gold Mining, you can compare the effects of market volatilities on Sun Life and AuQ Gold 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 AuQ Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and AuQ Gold.
Diversification Opportunities for Sun Life and AuQ Gold
Very good diversification
The 3 months correlation between Sun and AuQ is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and AuQ Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AuQ Gold Mining 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 AuQ Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AuQ Gold Mining has no effect on the direction of Sun Life i.e., Sun Life and AuQ Gold go up and down completely randomly.
Pair Corralation between Sun Life and AuQ Gold
Assuming the 90 days trading horizon Sun Life is expected to generate 6.09 times less return on investment than AuQ Gold. But when comparing it to its historical volatility, Sun Life Financial is 9.01 times less risky than AuQ Gold. It trades about 0.1 of its potential returns per unit of risk. AuQ Gold Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 16.00 in AuQ Gold Mining on September 3, 2024 and sell it today you would earn a total of 6.00 from holding AuQ Gold Mining or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. AuQ Gold Mining
Performance |
| Timeline |
| Sun Life Financial |
| AuQ Gold Mining |
Sun Life and AuQ Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and AuQ Gold
The main advantage of trading using opposite Sun Life and AuQ Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, AuQ Gold 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 AuQ Gold will offset losses from the drop in AuQ Gold's long position.| Sun Life vs. Definity Financial Corp | Sun Life vs. Information Services | Sun Life vs. CI Financial Corp | Sun Life vs. iA Financial |
| AuQ Gold vs. Exco Technologies Limited | AuQ Gold vs. Data Communications Management | AuQ Gold vs. Quorum Information Technologies | AuQ Gold vs. MTY Food Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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