Correlation Between Sun Lif and Royal Bank
Can any of the company-specific risk be diversified away by investing in both Sun Lif and Royal Bank 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 Lif and Royal Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Lif Non and Royal Bank of, you can compare the effects of market volatilities on Sun Lif and Royal Bank 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 Lif with a short position of Royal Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Lif and Royal Bank.
Diversification Opportunities for Sun Lif and Royal Bank
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Royal is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sun Lif Non and Royal Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Bank and Sun Lif 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 Lif Non are associated (or correlated) with Royal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Bank has no effect on the direction of Sun Lif i.e., Sun Lif and Royal Bank go up and down completely randomly.
Pair Corralation between Sun Lif and Royal Bank
Assuming the 90 days trading horizon Sun Lif Non is expected to generate 1.36 times more return on investment than Royal Bank. However, Sun Lif is 1.36 times more volatile than Royal Bank of. It trades about 0.08 of its potential returns per unit of risk. Royal Bank of is currently generating about 0.07 per unit of risk. If you would invest 1,401 in Sun Lif Non on September 1, 2024 and sell it today you would earn a total of 498.00 from holding Sun Lif Non or generate 35.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Lif Non vs. Royal Bank of
Performance |
| Timeline |
| Sun Lif Non |
| Royal Bank |
Sun Lif and Royal Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Lif and Royal Bank
The main advantage of trading using opposite Sun Lif and Royal Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Lif position performs unexpectedly, Royal Bank 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 Royal Bank will offset losses from the drop in Royal Bank's long position.| Sun Lif vs. A W FOOD | Sun Lif vs. Canlan Ice Sports | Sun Lif vs. HOME DEPOT CDR | Sun Lif vs. Dream Office Real |
| Royal Bank vs. Maple Leaf Foods | Royal Bank vs. Oculus VisionTech | Royal Bank vs. Quorum Information Technologies | Royal Bank vs. Birchtech Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |