Correlation Between Sun Life and Denison Mines
Can any of the company-specific risk be diversified away by investing in both Sun Life and Denison Mines 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 Denison Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Life Non and Denison Mines Corp, you can compare the effects of market volatilities on Sun Life and Denison Mines 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 Denison Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Denison Mines.
Diversification Opportunities for Sun Life and Denison Mines
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Denison is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Non and Denison Mines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denison Mines Corp 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 Non are associated (or correlated) with Denison Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denison Mines Corp has no effect on the direction of Sun Life i.e., Sun Life and Denison Mines go up and down completely randomly.
Pair Corralation between Sun Life and Denison Mines
Assuming the 90 days trading horizon Sun Life Non is expected to generate 0.18 times more return on investment than Denison Mines. However, Sun Life Non is 5.61 times less risky than Denison Mines. It trades about 0.24 of its potential returns per unit of risk. Denison Mines Corp is currently generating about -0.14 per unit of risk. If you would invest 1,615 in Sun Life Non on September 19, 2024 and sell it today you would earn a total of 41.00 from holding Sun Life Non or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Non vs. Denison Mines Corp
Performance |
| Timeline |
| Sun Life Non |
| Denison Mines Corp |
Sun Life and Denison Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Denison Mines
The main advantage of trading using opposite Sun Life and Denison Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Denison Mines 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 Denison Mines will offset losses from the drop in Denison Mines' long position.| Sun Life vs. Sun Life Financial | Sun Life vs. Solar Alliance Energy | Sun Life vs. EcoSynthetix | Sun Life vs. Tarku Resources |
| Denison Mines vs. Cameco Corp | Denison Mines vs. Fission Uranium Corp | Denison Mines vs. Energy Fuels | Denison Mines vs. Ur 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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