Correlation Between Sun Life and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Sun Life and Barrick Gold 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 Barrick Gold 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 Barrick Gold Corp, you can compare the effects of market volatilities on Sun Life and Barrick Gold 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 Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Barrick Gold.
Diversification Opportunities for Sun Life and Barrick Gold
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and Barrick is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Sun Life i.e., Sun Life and Barrick Gold go up and down completely randomly.
Pair Corralation between Sun Life and Barrick Gold
Considering the 90-day investment horizon Sun Life is expected to generate 1.54 times less return on investment than Barrick Gold. But when comparing it to its historical volatility, Sun Life Financial is 1.95 times less risky than Barrick Gold. It trades about 0.09 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,450 in Barrick Gold Corp on August 27, 2024 and sell it today you would earn a total of 372.00 from holding Barrick Gold Corp or generate 25.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Barrick Gold Corp
Performance |
| Timeline |
| Sun Life Financial |
| Barrick Gold Corp |
Sun Life and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Barrick Gold
The main advantage of trading using opposite Sun Life and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold'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 |
| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Pan American Silver | Barrick Gold vs. Wheaton Precious Metals | Barrick Gold vs. Kinross Gold |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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