Correlation Between Sun Life and Idaho Strategic

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

Diversification Opportunities for Sun Life and Idaho Strategic

-0.75

Correlation Coefficient

Sun Life  Idaho Strategic

Pay attention - limited upside

The 3 months correlation between Sun and Idaho is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Idaho Strategic Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idaho Strategic Resources 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 Idaho Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idaho Strategic Resources has no effect on the direction of Sun Life i.e., Sun Life and Idaho Strategic go up and down completely randomly.

Pair Corralation between Sun Life and Idaho Strategic

Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.23 times more return on investment than Idaho Strategic. However, Sun Life Financial is 4.4 times less risky than Idaho Strategic. It trades about -0.34 of its potential returns per unit of risk. Idaho Strategic Resources is currently generating about -0.21 per unit of risk. If you would invest  6,214  in Sun Life Financial on October 7, 2024 and sell it today you would lose (296.00) from holding Sun Life Financial or give up 4.76% of portfolio value over 90 days.

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

Sun Life Financial  vs.  Idaho Strategic Resources

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.

Idaho Strategic Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Idaho Strategic Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Sun Life and Idaho Strategic

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

The idea behind Sun Life Financial and Idaho Strategic Resources 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.