Correlation Between Urbana and Sun Lif
Can any of the company-specific risk be diversified away by investing in both Urbana and Sun Lif 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 Lif into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urbana and Sun Lif Non, you can compare the effects of market volatilities on Urbana and Sun Lif 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 Lif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urbana and Sun Lif.
Diversification Opportunities for Urbana and Sun Lif
Pay attention - limited upside
The 3 months correlation between Urbana and Sun is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Urbana and Sun Lif Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Lif Non 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 Lif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Lif Non has no effect on the direction of Urbana i.e., Urbana and Sun Lif go up and down completely randomly.
Pair Corralation between Urbana and Sun Lif
Assuming the 90 days trading horizon Urbana is expected to generate 1.81 times more return on investment than Sun Lif. However, Urbana is 1.81 times more volatile than Sun Lif Non. It trades about 0.04 of its potential returns per unit of risk. Sun Lif Non is currently generating about 0.05 per unit of risk. If you would invest 413.00 in Urbana on August 28, 2024 and sell it today you would earn a total of 153.00 from holding Urbana or generate 37.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urbana vs. Sun Lif Non
Performance |
| Timeline |
| Urbana |
| Sun Lif Non |
Urbana and Sun Lif Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urbana and Sun Lif
The main advantage of trading using opposite Urbana and Sun Lif positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urbana position performs unexpectedly, Sun Lif 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 Lif will offset losses from the drop in Sun Lif's long position.The idea behind Urbana and Sun Lif Non pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sun Lif vs. Cogeco Communications | Sun Lif vs. Verizon Communications CDR | Sun Lif vs. A W FOOD | Sun Lif vs. Rubicon Organics |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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