Correlation Between SunCoke Energy and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both SunCoke Energy and Canaf Investments 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 SunCoke Energy and Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunCoke Energy and Canaf Investments, you can compare the effects of market volatilities on SunCoke Energy and Canaf Investments 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 SunCoke Energy with a short position of Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunCoke Energy and Canaf Investments.
Diversification Opportunities for SunCoke Energy and Canaf Investments
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SunCoke and Canaf is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SunCoke Energy and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and SunCoke Energy 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 SunCoke Energy are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of SunCoke Energy i.e., SunCoke Energy and Canaf Investments go up and down completely randomly.
Pair Corralation between SunCoke Energy and Canaf Investments
Considering the 90-day investment horizon SunCoke Energy is expected to generate 5.48 times more return on investment than Canaf Investments. However, SunCoke Energy is 5.48 times more volatile than Canaf Investments. It trades about 0.39 of its potential returns per unit of risk. Canaf Investments is currently generating about -0.21 per unit of risk. If you would invest 837.00 in SunCoke Energy on August 23, 2024 and sell it today you would earn a total of 420.00 from holding SunCoke Energy or generate 50.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SunCoke Energy vs. Canaf Investments
Performance |
| Timeline |
| SunCoke Energy |
| Canaf Investments |
SunCoke Energy and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunCoke Energy and Canaf Investments
The main advantage of trading using opposite SunCoke Energy and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunCoke Energy position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| SunCoke Energy vs. Warrior Met Coal | SunCoke Energy vs. Arch Resources | SunCoke Energy vs. Alpha Metallurgical Resources | SunCoke Energy vs. American Resources Corp |
| Canaf Investments vs. Alpha Metallurgical Resources | Canaf Investments vs. Arch Resources | Canaf Investments vs. Destiny Tech100 | Canaf Investments vs. Alphabet Inc Class C |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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