Correlation Between Sun Life and Information Services
Can any of the company-specific risk be diversified away by investing in both Sun Life and Information Services 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 Information Services 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 Information Services, you can compare the effects of market volatilities on Sun Life and Information Services 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 Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Information Services.
Diversification Opportunities for Sun Life and Information Services
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sun and Information is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Non and Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information 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 Non are associated (or correlated) with Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Sun Life i.e., Sun Life and Information Services go up and down completely randomly.
Pair Corralation between Sun Life and Information Services
Assuming the 90 days trading horizon Sun Life Non is expected to generate 0.39 times more return on investment than Information Services. However, Sun Life Non is 2.58 times less risky than Information Services. It trades about 0.16 of its potential returns per unit of risk. Information Services is currently generating about -0.32 per unit of risk. If you would invest 1,611 in Sun Life Non on September 1, 2024 and sell it today you would earn a total of 21.00 from holding Sun Life Non or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Non vs. Information Services
Performance |
| Timeline |
| Sun Life Non |
| Information Services |
Sun Life and Information Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Information Services
The main advantage of trading using opposite Sun Life and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' long position.| Sun Life vs. East Side Games | Sun Life vs. Data Communications Management | Sun Life vs. Canlan Ice Sports | Sun Life vs. Boat Rocker Media |
| Information Services vs. Baylin Technologies | Information Services vs. Kits Eyecare | Information Services vs. Supremex | Information Services vs. iShares Canadian HYBrid |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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