Correlation Between Sun Life and Tilray
Can any of the company-specific risk be diversified away by investing in both Sun Life and Tilray 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 Tilray 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 Tilray Inc, you can compare the effects of market volatilities on Sun Life and Tilray 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 Tilray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Tilray.
Diversification Opportunities for Sun Life and Tilray
Excellent diversification
The 3 months correlation between Sun and Tilray is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Non and Tilray Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tilray Inc 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 Tilray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tilray Inc has no effect on the direction of Sun Life i.e., Sun Life and Tilray go up and down completely randomly.
Pair Corralation between Sun Life and Tilray
Assuming the 90 days trading horizon Sun Life Non is expected to generate 0.2 times more return on investment than Tilray. However, Sun Life Non is 5.04 times less risky than Tilray. It trades about 0.27 of its potential returns per unit of risk. Tilray Inc is currently generating about -0.34 per unit of risk. If you would invest 1,706 in Sun Life Non on November 3, 2024 and sell it today you would earn a total of 77.00 from holding Sun Life Non or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Non vs. Tilray Inc
Performance |
| Timeline |
| Sun Life Non |
| Tilray Inc |
Sun Life and Tilray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Tilray
The main advantage of trading using opposite Sun Life and Tilray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Tilray 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 Tilray will offset losses from the drop in Tilray's long position.| Sun Life vs. Northstar Clean Technologies | Sun Life vs. HPQ Silicon Resources | Sun Life vs. Canlan Ice Sports | Sun Life vs. Quorum Information Technologies |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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