Correlation Between Sun Life and AltaGas
Can any of the company-specific risk be diversified away by investing in both Sun Life and AltaGas 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 AltaGas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Life Financial and AltaGas, you can compare the effects of market volatilities on Sun Life and AltaGas 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 AltaGas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and AltaGas.
Diversification Opportunities for Sun Life and AltaGas
Very good diversification
The 3 months correlation between Sun and AltaGas is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas 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 Financial are associated (or correlated) with AltaGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltaGas has no effect on the direction of Sun Life i.e., Sun Life and AltaGas go up and down completely randomly.
Pair Corralation between Sun Life and AltaGas
Assuming the 90 days trading horizon Sun Life Financial is expected to under-perform the AltaGas. In addition to that, Sun Life is 2.3 times more volatile than AltaGas. It trades about -0.12 of its total potential returns per unit of risk. AltaGas is currently generating about 0.21 per unit of volatility. If you would invest 3,365 in AltaGas on November 29, 2024 and sell it today you would earn a total of 114.00 from holding AltaGas or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sun Life Financial vs. AltaGas
Performance |
| Timeline |
| Sun Life Financial |
| AltaGas |
Sun Life and AltaGas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and AltaGas
The main advantage of trading using opposite Sun Life and AltaGas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, AltaGas 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 AltaGas will offset losses from the drop in AltaGas' long position.| Sun Life vs. Manulife Financial Corp | Sun Life vs. Great West Lifeco | Sun Life vs. National Bank of | Sun Life vs. Canadian Imperial Bank |
| AltaGas vs. Pembina Pipeline Corp | AltaGas vs. Keyera Corp | AltaGas vs. Emera Inc | AltaGas vs. Algonquin Power Utilities |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |