Correlation Between Idaho Strategic and Sun Life

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

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

Diversification Opportunities for Idaho Strategic and Sun Life

-0.75

Correlation Coefficient

Idaho Strategic  Sun Life

Pay attention - limited upside

The 3 months correlation between Idaho and Sun is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Idaho Strategic Resources 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 Idaho Strategic 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 Idaho Strategic Resources 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 Idaho Strategic i.e., Idaho Strategic and Sun Life go up and down completely randomly.

Pair Corralation between Idaho Strategic and Sun Life

Considering the 90-day investment horizon Idaho Strategic Resources is expected to under-perform the Sun Life. In addition to that, Idaho Strategic is 4.42 times more volatile than Sun Life Financial. It trades about -0.24 of its total potential returns per unit of risk. Sun Life Financial is currently generating about -0.3 per unit of volatility. If you would invest  6,166  in Sun Life Financial on October 8, 2024 and sell it today you would lose (248.00) from holding Sun Life Financial or give up 4.02% of portfolio value over 90 days.

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

Idaho Strategic Resources  vs.  Sun Life Financial

Idaho Strategic Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Idaho Strategic Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Sun Life Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Sun Life is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Idaho Strategic and Sun Life

The main advantage of trading using opposite Idaho Strategic and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Idaho Strategic 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 Idaho Strategic Resources and Sun Life Financial 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.