Correlation Between Canaf Investments and Sun Lif

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

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

Diversification Opportunities for Canaf Investments and Sun Lif

-0.56

Correlation Coefficient

Canaf Investments  Sun Lif

Excellent diversification

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

Pair Corralation between Canaf Investments and Sun Lif

Assuming the 90 days horizon Canaf Investments is expected to generate 4.75 times more return on investment than Sun Lif. However, Canaf Investments is 4.75 times more volatile than Sun Lif Non. It trades about 0.02 of its potential returns per unit of risk. Sun Lif Non is currently generating about 0.03 per unit of risk. If you would invest  32.00  in Canaf Investments on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Canaf Investments or generate 0.0% return on investment over 90 days.

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

Canaf Investments  vs.  Sun Lif Non

Canaf Investments

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canaf Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Canaf Investments is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sun Lif Non

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Lif Non are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Sun Lif is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Canaf Investments and Sun Lif

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

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.