Correlation Between Sun Life and Ballantyne Strong

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

Diversification Opportunities for Sun Life and Ballantyne Strong

-0.07

Correlation Coefficient

Sun Life  Ballantyne Strong

Good diversification

The 3 months correlation between Sun and Ballantyne is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Ballantyne Strong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballantyne Strong 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 Ballantyne Strong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballantyne Strong has no effect on the direction of Sun Life i.e., Sun Life and Ballantyne Strong go up and down completely randomly.

Pair Corralation between Sun Life and Ballantyne Strong

If you would invest  265.00  in Ballantyne Strong on October 3, 2024 and sell it today you would earn a total of  0.00  from holding Ballantyne Strong or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Sun Life Financial  vs.  Ballantyne Strong

Sun Life Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Sun Life is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Ballantyne Strong

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ballantyne Strong has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ballantyne Strong is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sun Life and Ballantyne Strong

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

The idea behind Sun Life Financial and Ballantyne Strong 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.