Correlation Between Sun Life and Willow Biosciences
Can any of the company-specific risk be diversified away by investing in both Sun Life and Willow Biosciences 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 Willow Biosciences 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 Willow Biosciences, you can compare the effects of market volatilities on Sun Life and Willow Biosciences 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 Willow Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Willow Biosciences.
Diversification Opportunities for Sun Life and Willow Biosciences
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and Willow is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Non and Willow Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willow Biosciences 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 Willow Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willow Biosciences has no effect on the direction of Sun Life i.e., Sun Life and Willow Biosciences go up and down completely randomly.
Pair Corralation between Sun Life and Willow Biosciences
Assuming the 90 days trading horizon Sun Life Non is expected to generate 0.05 times more return on investment than Willow Biosciences. However, Sun Life Non is 19.95 times less risky than Willow Biosciences. It trades about 0.27 of its potential returns per unit of risk. Willow Biosciences is currently generating about -0.19 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Non vs. Willow Biosciences
Performance |
| Timeline |
| Sun Life Non |
| Willow Biosciences |
Sun Life and Willow Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Willow Biosciences
The main advantage of trading using opposite Sun Life and Willow Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Willow Biosciences 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 Willow Biosciences will offset losses from the drop in Willow Biosciences' long position.| Sun Life vs. Storage Vault Canada | Sun Life vs. Quorum Information Technologies | Sun Life vs. Questor Technology | Sun Life vs. Leons Furniture Limited |
| Willow Biosciences vs. Medipharm Labs Corp | Willow Biosciences vs. Cardiol Therapeutics Class | Willow Biosciences vs. StageZero Life Sciences |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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