Correlation Between Urbana and Sun Life
Can any of the company-specific risk be diversified away by investing in both Urbana 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 Urbana and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urbana and Sun Life Financial, you can compare the effects of market volatilities on Urbana 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 Urbana with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urbana and Sun Life.
Diversification Opportunities for Urbana and Sun Life
Very good diversification
The 3 months correlation between Urbana and Sun is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Urbana 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 Urbana 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 Urbana 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 Urbana i.e., Urbana and Sun Life go up and down completely randomly.
Pair Corralation between Urbana and Sun Life
Assuming the 90 days trading horizon Urbana is expected to generate 2.81 times more return on investment than Sun Life. However, Urbana is 2.81 times more volatile than Sun Life Financial. It trades about 0.13 of its potential returns per unit of risk. Sun Life Financial is currently generating about -0.1 per unit of risk. If you would invest 510.00 in Urbana on August 26, 2024 and sell it today you would earn a total of 53.00 from holding Urbana or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urbana vs. Sun Life Financial
Performance |
| Timeline |
| Urbana |
| Sun Life Financial |
Urbana and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urbana and Sun Life
The main advantage of trading using opposite Urbana and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urbana 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.| Urbana vs. Urbana | Urbana vs. Uniteds Limited | Urbana vs. Accord Financial Corp | Urbana vs. Clairvest Group |
| Sun Life vs. Forstrong Global Income | Sun Life vs. BMO Aggregate Bond | Sun Life vs. Terreno Resources Corp | Sun Life vs. iShares Canadian HYBrid |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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