Correlation Between TRADEGATE and SUN LIFE
Can any of the company-specific risk be diversified away by investing in both TRADEGATE and SUN LIFE 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 TRADEGATE and SUN LIFE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEGATE and SUN LIFE FINANCIAL, you can compare the effects of market volatilities on TRADEGATE and SUN LIFE 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 TRADEGATE with a short position of SUN LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEGATE and SUN LIFE.
Diversification Opportunities for TRADEGATE and SUN LIFE
Very weak diversification
The 3 months correlation between TRADEGATE and SUN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding TRADEGATE and SUN LIFE FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUN LIFE FINANCIAL and TRADEGATE 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 TRADEGATE are associated (or correlated) with SUN LIFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUN LIFE FINANCIAL has no effect on the direction of TRADEGATE i.e., TRADEGATE and SUN LIFE go up and down completely randomly.
Pair Corralation between TRADEGATE and SUN LIFE
Assuming the 90 days trading horizon TRADEGATE is expected to generate 0.2 times more return on investment than SUN LIFE. However, TRADEGATE is 4.89 times less risky than SUN LIFE. It trades about 0.0 of its potential returns per unit of risk. SUN LIFE FINANCIAL is currently generating about -0.14 per unit of risk. If you would invest 8,950 in TRADEGATE on November 4, 2024 and sell it today you would earn a total of 0.00 from holding TRADEGATE or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEGATE vs. SUN LIFE FINANCIAL
Performance |
| Timeline |
| TRADEGATE |
| SUN LIFE FINANCIAL |
TRADEGATE and SUN LIFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEGATE and SUN LIFE
The main advantage of trading using opposite TRADEGATE and SUN LIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEGATE position performs unexpectedly, SUN LIFE 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 SUN LIFE will offset losses from the drop in SUN LIFE's long position.| TRADEGATE vs. STRAYER EDUCATION | TRADEGATE vs. American Public Education | TRADEGATE vs. Melco Resorts Entertainment | TRADEGATE vs. G8 EDUCATION |
| SUN LIFE vs. Arrow Electronics | SUN LIFE vs. LG Electronics | SUN LIFE vs. INVITATION HOMES DL | SUN LIFE vs. STMicroelectronics NV |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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