Correlation Between Advent Wireless and Sun Life

Can any of the company-specific risk be diversified away by investing in both Advent Wireless 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 Advent Wireless and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advent Wireless and Sun Life Non, you can compare the effects of market volatilities on Advent Wireless 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 Advent Wireless with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Wireless and Sun Life.

Diversification Opportunities for Advent Wireless and Sun Life

-0.56

Correlation Coefficient

Advent Wireless  Sun Life

Excellent diversification

The 3 months correlation between Advent and Sun is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Advent Wireless 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 Advent Wireless 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 Advent Wireless 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 Advent Wireless i.e., Advent Wireless and Sun Life go up and down completely randomly.

Pair Corralation between Advent Wireless and Sun Life

Assuming the 90 days horizon Advent Wireless is expected to generate 1.01 times less return on investment than Sun Life. In addition to that, Advent Wireless is 3.22 times more volatile than Sun Life Non. It trades about 0.02 of its total potential returns per unit of risk. Sun Life Non is currently generating about 0.07 per unit of volatility. If you would invest  1,228  in Sun Life Non on December 1, 2024 and sell it today you would earn a total of  487.00  from holding Sun Life Non or generate 39.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Advent Wireless  vs.  Sun Life Non

Advent Wireless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advent Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Sun Life Non

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Non are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Sun Life is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Advent Wireless and Sun Life

The main advantage of trading using opposite Advent Wireless and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Wireless 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.

The idea behind Advent Wireless and Sun Life 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..