Correlation Between Sun Life and Slate Grocery
Can any of the company-specific risk be diversified away by investing in both Sun Life and Slate Grocery 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 Slate Grocery 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 Slate Grocery REIT, you can compare the effects of market volatilities on Sun Life and Slate Grocery 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 Slate Grocery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Slate Grocery.
Diversification Opportunities for Sun Life and Slate Grocery
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Slate is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT 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 Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of Sun Life i.e., Sun Life and Slate Grocery go up and down completely randomly.
Pair Corralation between Sun Life and Slate Grocery
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 0.33 times more return on investment than Slate Grocery. However, Sun Life Financial is 3.02 times less risky than Slate Grocery. It trades about 0.03 of its potential returns per unit of risk. Slate Grocery REIT is currently generating about -0.02 per unit of risk. If you would invest 1,902 in Sun Life Financial on February 29, 2024 and sell it today you would earn a total of 20.00 from holding Sun Life Financial or generate 1.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sun Life Financial vs. Slate Grocery REIT
Performance |
Timeline |
Sun Life Financial |
Slate Grocery REIT |
Sun Life and Slate Grocery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sun Life and Slate Grocery
The main advantage of trading using opposite Sun Life and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Slate Grocery 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 Slate Grocery will offset losses from the drop in Slate Grocery's long position.Sun Life vs. Sun Life Non | Sun Life vs. iShares Canadian HYBrid | Sun Life vs. Solar Alliance Energy | Sun Life vs. European Residential Real |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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