Correlation Between Sun Life and Canon
Can any of the company-specific risk be diversified away by investing in both Sun Life and Canon 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 Canon 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 Canon Inc ADR, you can compare the effects of market volatilities on Sun Life and Canon 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 Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Canon.
Diversification Opportunities for Sun Life and Canon
Good diversification
The 3 months correlation between Sun and Canon is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Canon Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc ADR 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 Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc ADR has no effect on the direction of Sun Life i.e., Sun Life and Canon go up and down completely randomly.
Pair Corralation between Sun Life and Canon
If you would invest 5,428 in Sun Life Financial on November 2, 2024 and sell it today you would earn a total of 340.00 from holding Sun Life Financial or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.97% |
| Values | Daily Returns |
Sun Life Financial vs. Canon Inc ADR
Performance |
| Timeline |
| Sun Life Financial |
| Canon Inc ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sun Life and Canon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Canon
The main advantage of trading using opposite Sun Life and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Canon 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 Canon will offset losses from the drop in Canon's long position.| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
| Canon vs. Ironveld Plc | Canon vs. Insteel Industries | Canon vs. CECO Environmental Corp | Canon vs. Inflection Point Acquisition |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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