Correlation Between GOLDMAN SACHS and Sun Life
Can any of the company-specific risk be diversified away by investing in both GOLDMAN SACHS 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 GOLDMAN SACHS and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLDMAN SACHS CDR and Sun Life Financial, you can compare the effects of market volatilities on GOLDMAN SACHS 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 GOLDMAN SACHS with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Sun Life.
Diversification Opportunities for GOLDMAN SACHS and Sun Life
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GOLDMAN and Sun is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR 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 GOLDMAN SACHS 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 GOLDMAN SACHS CDR 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 GOLDMAN SACHS i.e., GOLDMAN SACHS and Sun Life go up and down completely randomly.
Pair Corralation between GOLDMAN SACHS and Sun Life
Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to generate 2.9 times more return on investment than Sun Life. However, GOLDMAN SACHS is 2.9 times more volatile than Sun Life Financial. It trades about 0.16 of its potential returns per unit of risk. Sun Life Financial is currently generating about -0.04 per unit of risk. If you would invest 2,432 in GOLDMAN SACHS CDR on September 7, 2024 and sell it today you would earn a total of 544.00 from holding GOLDMAN SACHS CDR or generate 22.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
GOLDMAN SACHS CDR vs. Sun Life Financial
Performance |
Timeline |
GOLDMAN SACHS CDR |
Sun Life Financial |
GOLDMAN SACHS and Sun Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GOLDMAN SACHS and Sun Life
The main advantage of trading using opposite GOLDMAN SACHS and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDMAN SACHS 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.GOLDMAN SACHS vs. Royal Bank of | GOLDMAN SACHS vs. Guru Organic Energy | GOLDMAN SACHS vs. Canadian Imperial Bank | GOLDMAN SACHS vs. Everyday People Financial |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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