Correlation Between Sun Life and Optimi Health
Can any of the company-specific risk be diversified away by investing in both Sun Life and Optimi Health 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 Optimi Health 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 Optimi Health Corp, you can compare the effects of market volatilities on Sun Life and Optimi Health 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 Optimi Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Optimi Health.
Diversification Opportunities for Sun Life and Optimi Health
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Optimi is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Optimi Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimi Health Corp 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 Optimi Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimi Health Corp has no effect on the direction of Sun Life i.e., Sun Life and Optimi Health go up and down completely randomly.
Pair Corralation between Sun Life and Optimi Health
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.12 times more return on investment than Optimi Health. However, Sun Life Financial is 8.56 times less risky than Optimi Health. It trades about 0.14 of its potential returns per unit of risk. Optimi Health Corp is currently generating about -0.02 per unit of risk. If you would invest 5,585 in Sun Life Financial on September 18, 2024 and sell it today you would earn a total of 420.00 from holding Sun Life Financial or generate 7.52% 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. Optimi Health Corp
Performance |
Timeline |
Sun Life Financial |
Optimi Health Corp |
Sun Life and Optimi Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sun Life and Optimi Health
The main advantage of trading using opposite Sun Life and Optimi Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Optimi Health 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 Optimi Health will offset losses from the drop in Optimi Health's long position.Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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