Correlation Between Sun Lif and Sparx Technology
Can any of the company-specific risk be diversified away by investing in both Sun Lif and Sparx Technology 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 Sparx Technology 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 Sparx Technology, you can compare the effects of market volatilities on Sun Lif and Sparx Technology 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 Sparx Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Lif and Sparx Technology.
Diversification Opportunities for Sun Lif and Sparx Technology
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and Sparx is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sun Lif Non and Sparx Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparx Technology 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 Sparx Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparx Technology has no effect on the direction of Sun Lif i.e., Sun Lif and Sparx Technology go up and down completely randomly.
Pair Corralation between Sun Lif and Sparx Technology
Assuming the 90 days trading horizon Sun Lif Non is expected to under-perform the Sparx Technology. But the preferred stock apears to be less risky and, when comparing its historical volatility, Sun Lif Non is 1.59 times less risky than Sparx Technology. The preferred stock trades about -0.02 of its potential returns per unit of risk. The Sparx Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,195 in Sparx Technology on August 30, 2024 and sell it today you would earn a total of 397.00 from holding Sparx Technology or generate 18.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sun Lif Non vs. Sparx Technology
Performance |
| Timeline |
| Sun Lif Non |
| Sparx Technology |
Sun Lif and Sparx Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Lif and Sparx Technology
The main advantage of trading using opposite Sun Lif and Sparx Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Lif position performs unexpectedly, Sparx Technology 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 Sparx Technology will offset losses from the drop in Sparx Technology's long position.| Sun Lif vs. Sun Life Financial | Sun Lif vs. Sun Life Financial | Sun Lif vs. Sun Life Financial | Sun Lif vs. iA Financial |
| Sparx Technology vs. Caribbean Utilities | Sparx Technology vs. Algonquin Power Utilities | Sparx Technology vs. Ocumetics Technology Corp | Sparx Technology vs. NextSource Materials |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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