Correlation Between Sun Life and 918204AR9

Can any of the company-specific risk be diversified away by investing in both Sun Life and 918204AR9 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 918204AR9 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 V F P, you can compare the effects of market volatilities on Sun Life and 918204AR9 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 918204AR9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and 918204AR9.

Diversification Opportunities for Sun Life and 918204AR9

-0.32

Correlation Coefficient

Sun Life  918204AR9

Very good diversification

The 3 months correlation between Sun and 918204AR9 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and V F P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 918204AR9 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 918204AR9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 918204AR9 has no effect on the direction of Sun Life i.e., Sun Life and 918204AR9 go up and down completely randomly.

Pair Corralation between Sun Life and 918204AR9

Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.45 times more return on investment than 918204AR9. However, Sun Life Financial is 2.24 times less risky than 918204AR9. It trades about 0.07 of its potential returns per unit of risk. V F P is currently generating about 0.02 per unit of risk. If you would invest  4,259  in Sun Life Financial on August 31, 2024 and sell it today you would earn a total of  1,833  from holding Sun Life Financial or generate 43.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.21%
Values	Daily Returns

Sun Life Financial  vs.  V F P

Sun Life Financial

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, Sun Life may actually be approaching a critical reversion point that can send shares even higher in December 2024.

918204AR9

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in V F P are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 918204AR9 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sun Life and 918204AR9

The main advantage of trading using opposite Sun Life and 918204AR9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, 918204AR9 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 918204AR9 will offset losses from the drop in 918204AR9's long position.

The idea behind Sun Life Financial and V F P 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.