Correlation Between 2028 Investment and Sun Lif

Can any of the company-specific risk be diversified away by investing in both 2028 Investment 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 2028 Investment and Sun Lif into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 2028 Investment Grade and Sun Lif Non, you can compare the effects of market volatilities on 2028 Investment 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 2028 Investment with a short position of Sun Lif. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2028 Investment and Sun Lif.

Diversification Opportunities for 2028 Investment and Sun Lif

0.4

Correlation Coefficient

2028 Investment  Sun Lif

Very weak diversification

The 3 months correlation between 2028 and Sun is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding 2028 Investment Grade 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 2028 Investment 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 2028 Investment Grade 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 2028 Investment i.e., 2028 Investment and Sun Lif go up and down completely randomly.

Pair Corralation between 2028 Investment and Sun Lif

Assuming the 90 days trading horizon 2028 Investment Grade is expected to generate 3.69 times more return on investment than Sun Lif. However, 2028 Investment is 3.69 times more volatile than Sun Lif Non. It trades about 0.03 of its potential returns per unit of risk. Sun Lif Non is currently generating about 0.11 per unit of risk. If you would invest  1,020  in 2028 Investment Grade on December 22, 2024 and sell it today you would earn a total of  33.00  from holding 2028 Investment Grade or generate 3.24% return on investment over 90 days.

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

2028 Investment Grade  vs.  Sun Lif Non

2028 Investment Grade

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 2028 Investment Grade are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, 2028 Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sun Lif Non

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Lif Non are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Sun Lif may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with 2028 Investment and Sun Lif

The main advantage of trading using opposite 2028 Investment and Sun Lif positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2028 Investment 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 2028 Investment Grade 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.