Correlation Between Sun Lif and High Arctic
Can any of the company-specific risk be diversified away by investing in both Sun Lif and High Arctic 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 Sun Lif and High Arctic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Lif Non and High Arctic Energy, you can compare the effects of market volatilities on Sun Lif and High Arctic 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 Sun Lif with a short position of High Arctic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Lif and High Arctic.
Diversification Opportunities for Sun Lif and High Arctic
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and High is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sun Lif Non and High Arctic Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Arctic Energy and Sun Lif 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 Sun Lif Non are associated (or correlated) with High Arctic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Arctic Energy has no effect on the direction of Sun Lif i.e., Sun Lif and High Arctic go up and down completely randomly.
Pair Corralation between Sun Lif and High Arctic
Assuming the 90 days trading horizon Sun Lif Non is expected to generate 1.03 times more return on investment than High Arctic. However, Sun Lif is 1.03 times more volatile than High Arctic Energy. It trades about 0.23 of its potential returns per unit of risk. High Arctic Energy is currently generating about -0.19 per unit of risk. If you would invest 1,901 in Sun Lif Non on October 11, 2024 and sell it today you would earn a total of 81.00 from holding Sun Lif Non or generate 4.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sun Lif Non vs. High Arctic Energy
Performance |
Timeline |
Sun Lif Non |
High Arctic Energy |
Sun Lif and High Arctic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sun Lif and High Arctic
The main advantage of trading using opposite Sun Lif and High Arctic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Lif position performs unexpectedly, High Arctic 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 High Arctic will offset losses from the drop in High Arctic's long position.Sun Lif vs. Solid Impact Investments | Sun Lif vs. Brookfield Office Properties | Sun Lif vs. Primaris Retail RE | Sun Lif vs. Rocky Mountain Liquor |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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