Correlation Between Sun Life and Anterix

Can any of the company-specific risk be diversified away by investing in both Sun Life and Anterix 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 Anterix 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 Anterix, you can compare the effects of market volatilities on Sun Life and Anterix 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 Anterix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Anterix.

Diversification Opportunities for Sun Life and Anterix

-0.37

Correlation Coefficient

Sun Life  Anterix

Very good diversification

The 3 months correlation between Sun and Anterix is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Anterix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anterix 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 Anterix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anterix has no effect on the direction of Sun Life i.e., Sun Life and Anterix go up and down completely randomly.

Pair Corralation between Sun Life and Anterix

Considering the 90-day investment horizon Sun Life is expected to generate 1.4 times less return on investment than Anterix. But when comparing it to its historical volatility, Sun Life Financial is 2.68 times less risky than Anterix. It trades about 0.06 of its potential returns per unit of risk. Anterix is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,039  in Anterix on December 2, 2024 and sell it today you would earn a total of  861.00  from holding Anterix or generate 28.33% return on investment over 90 days.

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

Sun Life Financial  vs.  Anterix

Sun Life Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Life Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Anterix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anterix are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Anterix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sun Life and Anterix

The main advantage of trading using opposite Sun Life and Anterix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Anterix 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 Anterix will offset losses from the drop in Anterix's long position.

The idea behind Sun Life Financial and Anterix 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.