Correlation Between High Liner and Sun Life

Can any of the company-specific risk be diversified away by investing in both High Liner and Sun Life 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 High Liner and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between High Liner Foods and Sun Life Financial, you can compare the effects of market volatilities on High Liner and Sun Life 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 High Liner with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Sun Life.

Diversification Opportunities for High Liner and Sun Life

0.63

Correlation Coefficient

High Liner  Sun Life

Poor diversification

The 3 months correlation between High and Sun is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial and High Liner 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 High Liner Foods are associated (or correlated) with Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of High Liner i.e., High Liner and Sun Life go up and down completely randomly.

Pair Corralation between High Liner and Sun Life

Assuming the 90 days trading horizon High Liner Foods is expected to under-perform the Sun Life. In addition to that, High Liner is 2.43 times more volatile than Sun Life Financial. It trades about -0.07 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.32 per unit of volatility. If you would invest  2,016  in Sun Life Financial on April 16, 2025 and sell it today you would earn a total of  54.00  from holding Sun Life Financial or generate 2.68% return on investment over 90 days.

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

High Liner Foods  vs.  Sun Life Financial

High Liner Foods

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in High Liner Foods are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, High Liner may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Sun Life Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Sun Life may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with High Liner and Sun Life

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

The idea behind High Liner Foods and Sun Life Financial 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.