Correlation Between Sun Life and NioCorp Developments
Can any of the company-specific risk be diversified away by investing in both Sun Life and NioCorp Developments 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 NioCorp Developments 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 NioCorp Developments Ltd, you can compare the effects of market volatilities on Sun Life and NioCorp Developments 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 NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and NioCorp Developments.
Diversification Opportunities for Sun Life and NioCorp Developments
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and NioCorp is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments 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 NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of Sun Life i.e., Sun Life and NioCorp Developments go up and down completely randomly.
Pair Corralation between Sun Life and NioCorp Developments
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.27 times more return on investment than NioCorp Developments. However, Sun Life Financial is 3.7 times less risky than NioCorp Developments. It trades about 0.52 of its potential returns per unit of risk. NioCorp Developments Ltd is currently generating about -0.37 per unit of risk. If you would invest 5,488 in Sun Life Financial on September 1, 2024 and sell it today you would earn a total of 651.00 from holding Sun Life Financial or generate 11.86% 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. NioCorp Developments Ltd
Performance |
| Timeline |
| Sun Life Financial |
| NioCorp Developments |
Sun Life and NioCorp Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and NioCorp Developments
The main advantage of trading using opposite Sun Life and NioCorp Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, NioCorp Developments 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 NioCorp Developments will offset losses from the drop in NioCorp Developments' long position.| Sun Life vs. Hartford Financial Services | Sun Life vs. Goosehead Insurance | Sun Life vs. International General Insurance | Sun Life vs. Enstar Group Limited |
| NioCorp Developments vs. Paiute Oil Mining | NioCorp Developments vs. Marfrig Global Foods | NioCorp Developments vs. Emerson Radio | NioCorp Developments vs. Reservoir Media |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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