Correlation Between Sun Life and Elcora Advanced
Can any of the company-specific risk be diversified away by investing in both Sun Life and Elcora Advanced 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 Elcora Advanced 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 Elcora Advanced Materials, you can compare the effects of market volatilities on Sun Life and Elcora Advanced 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 Elcora Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Elcora Advanced.
Diversification Opportunities for Sun Life and Elcora Advanced
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Elcora is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Elcora Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elcora Advanced Materials 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 Elcora Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elcora Advanced Materials has no effect on the direction of Sun Life i.e., Sun Life and Elcora Advanced go up and down completely randomly.
Pair Corralation between Sun Life and Elcora Advanced
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 0.17 times more return on investment than Elcora Advanced. However, Sun Life Financial is 5.94 times less risky than Elcora Advanced. It trades about 0.16 of its potential returns per unit of risk. Elcora Advanced Materials is currently generating about -0.04 per unit of risk. If you would invest 1,973 in Sun Life Financial on April 24, 2025 and sell it today you would earn a total of 131.00 from holding Sun Life Financial or generate 6.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sun Life Financial vs. Elcora Advanced Materials
Performance |
Timeline |
Sun Life Financial |
Elcora Advanced Materials |
Sun Life and Elcora Advanced Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sun Life and Elcora Advanced
The main advantage of trading using opposite Sun Life and Elcora Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Elcora Advanced 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 Elcora Advanced will offset losses from the drop in Elcora Advanced's long position.Sun Life vs. Dream Office Real | Sun Life vs. Kelso Technologies | Sun Life vs. Diversified Royalty Corp | Sun Life vs. North American Construction |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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