Correlation Between A W and Sun Life
Can any of the company-specific risk be diversified away by investing in both A W 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 A W and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A W FOOD and Sun Life Non, you can compare the effects of market volatilities on A W 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 A W with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of A W and Sun Life.
Diversification Opportunities for A W and Sun Life
Pay attention - limited upside
The 3 months correlation between A W and Sun is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding A W FOOD and Sun Life Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Non and A W 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 A W FOOD 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 Non has no effect on the direction of A W i.e., A W and Sun Life go up and down completely randomly.
Pair Corralation between A W and Sun Life
Assuming the 90 days horizon A W FOOD is expected to under-perform the Sun Life. In addition to that, A W is 1.88 times more volatile than Sun Life Non. It trades about -0.08 of its total potential returns per unit of risk. Sun Life Non is currently generating about 0.11 per unit of volatility. If you would invest 1,627 in Sun Life Non on December 1, 2024 and sell it today you would earn a total of 88.00 from holding Sun Life Non or generate 5.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
A W FOOD vs. Sun Life Non
Performance |
Timeline |
A W FOOD |
Sun Life Non |
A W and Sun Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with A W and Sun Life
The main advantage of trading using opposite A W and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A W 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.A W vs. Flow Beverage Corp | A W vs. Slate Grocery REIT | A W vs. Pembina Pipeline Corp | A W vs. Farstarcap Investment Corp |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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