Correlation Between Purpose Multi and Sun Life
Can any of the company-specific risk be diversified away by investing in both Purpose Multi 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 Purpose Multi and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Purpose Multi Asset Income and Sun Life Non, you can compare the effects of market volatilities on Purpose Multi 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 Purpose Multi with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Purpose Multi and Sun Life.
Diversification Opportunities for Purpose Multi and Sun Life
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Purpose and Sun is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Purpose Multi Asset Income 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 Purpose Multi 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 Purpose Multi Asset Income 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 Purpose Multi i.e., Purpose Multi and Sun Life go up and down completely randomly.
Pair Corralation between Purpose Multi and Sun Life
Assuming the 90 days trading horizon Purpose Multi is expected to generate 16.58 times less return on investment than Sun Life. In addition to that, Purpose Multi is 1.07 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 0.32 per unit of volatility. If you would invest 1,609 in Sun Life Non on October 22, 2024 and sell it today you would earn a total of 178.00 from holding Sun Life Non or generate 11.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Purpose Multi Asset Income vs. Sun Life Non
Performance |
Timeline |
Purpose Multi Asset |
Sun Life Non |
Purpose Multi and Sun Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Purpose Multi and Sun Life
The main advantage of trading using opposite Purpose Multi and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Purpose Multi 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.Purpose Multi vs. Purpose International Dividend | Purpose Multi vs. Purpose Premium Yield | Purpose Multi vs. Purpose Monthly Income | Purpose Multi vs. Purpose Total Return |
Sun Life vs. Sun Life Financial | Sun Life vs. Sun Life Financial | Sun Life vs. BMO Aggregate Bond | Sun Life vs. iShares Canadian HYBrid |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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