Correlation Between Terreno Resources and Sun Life
Can any of the company-specific risk be diversified away by investing in both Terreno Resources 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 Terreno Resources and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terreno Resources Corp and Sun Life Financial, you can compare the effects of market volatilities on Terreno Resources 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 Terreno Resources with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terreno Resources and Sun Life.
Diversification Opportunities for Terreno Resources and Sun Life
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Terreno and Sun is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Terreno Resources Corp 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 Terreno Resources 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 Terreno Resources Corp 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 Terreno Resources i.e., Terreno Resources and Sun Life go up and down completely randomly.
Pair Corralation between Terreno Resources and Sun Life
Assuming the 90 days trading horizon Terreno Resources Corp is expected to generate 17.08 times more return on investment than Sun Life. However, Terreno Resources is 17.08 times more volatile than Sun Life Financial. It trades about 0.07 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.04 per unit of risk. If you would invest 1.50 in Terreno Resources Corp on August 30, 2024 and sell it today you would lose (0.50) from holding Terreno Resources Corp or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terreno Resources Corp vs. Sun Life Financial
Performance |
| Timeline |
| Terreno Resources Corp |
| Sun Life Financial |
Terreno Resources and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terreno Resources and Sun Life
The main advantage of trading using opposite Terreno Resources and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terreno Resources 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.| Terreno Resources vs. First Majestic Silver | Terreno Resources vs. Ivanhoe Energy | Terreno Resources vs. Orezone Gold Corp | Terreno Resources vs. Faraday Copper Corp |
| Sun Life vs. Walmart Inc CDR | Sun Life vs. Amazon CDR | Sun Life vs. Berkshire Hathaway CDR | Sun Life vs. UnitedHealth Group CDR |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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