Correlation Between Sun Life and Apex Mining
Can any of the company-specific risk be diversified away by investing in both Sun Life and Apex Mining 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 Life and Apex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Life Financial and Apex Mining Co, you can compare the effects of market volatilities on Sun Life and Apex Mining 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 Life with a short position of Apex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Apex Mining.
Diversification Opportunities for Sun Life and Apex Mining
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sun and Apex is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Apex Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Mining and Sun Life 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 Life Financial are associated (or correlated) with Apex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Mining has no effect on the direction of Sun Life i.e., Sun Life and Apex Mining go up and down completely randomly.
Pair Corralation between Sun Life and Apex Mining
Assuming the 90 days trading horizon Sun Life Financial is expected to under-perform the Apex Mining. In addition to that, Sun Life is 2.34 times more volatile than Apex Mining Co. It trades about 0.0 of its total potential returns per unit of risk. Apex Mining Co is currently generating about 0.12 per unit of volatility. If you would invest 352.00 in Apex Mining Co on December 2, 2024 and sell it today you would earn a total of 49.00 from holding Apex Mining Co or generate 13.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 78.33% |
Values | Daily Returns |
Sun Life Financial vs. Apex Mining Co
Performance |
Timeline |
Sun Life Financial |
Apex Mining |
Sun Life and Apex Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sun Life and Apex Mining
The main advantage of trading using opposite Sun Life and Apex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Apex Mining 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 Apex Mining will offset losses from the drop in Apex Mining's long position.Sun Life vs. Crown Asia Chemicals | Sun Life vs. Transpacific Broadband Group | Sun Life vs. Allhome Corp | Sun Life vs. Converge Information Communications |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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