Correlation Between Sun Lif and Champion Iron

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

By analyzing existing cross correlation between Sun Lif Non and Champion Iron, you can compare the effects of market volatilities on Sun Lif and Champion Iron 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 Lif with a short position of Champion Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Lif and Champion Iron.

Diversification Opportunities for Sun Lif and Champion Iron

0.26

Correlation Coefficient

Sun Lif  Champion Iron

Modest diversification

The 3 months correlation between Sun and Champion is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sun Lif Non and Champion Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron and Sun Lif 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 Lif Non are associated (or correlated) with Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron has no effect on the direction of Sun Lif i.e., Sun Lif and Champion Iron go up and down completely randomly.

Pair Corralation between Sun Lif and Champion Iron

Assuming the 90 days trading horizon Sun Lif Non is expected to generate 0.45 times more return on investment than Champion Iron. However, Sun Lif Non is 2.24 times less risky than Champion Iron. It trades about 0.04 of its potential returns per unit of risk. Champion Iron is currently generating about -0.03 per unit of risk. If you would invest  2,156  in Sun Lif Non on July 22, 2025 and sell it today you would earn a total of  52.00  from holding Sun Lif Non or generate 2.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Sun Lif Non  vs.  Champion Iron

Sun Lif Non

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Lif Non are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Sun Lif is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Champion Iron

Risk-Adjusted Performance

Weakest

Over the last 90 days Champion Iron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Champion Iron 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 Lif and Champion Iron

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

The idea behind Sun Lif Non and Champion Iron 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.