Correlation Between SUN LIFE and SCHALTBAU HOLDING

Can any of the company-specific risk be diversified away by investing in both SUN LIFE and SCHALTBAU HOLDING 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 SCHALTBAU HOLDING 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 SCHALTBAU HOLDING, you can compare the effects of market volatilities on SUN LIFE and SCHALTBAU HOLDING 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 SCHALTBAU HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN LIFE and SCHALTBAU HOLDING.

Diversification Opportunities for SUN LIFE and SCHALTBAU HOLDING

0.54

Correlation Coefficient

SUN LIFE  SCHALTBAU HOLDING

Very weak diversification

The 3 months correlation between SUN and SCHALTBAU is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SUN LIFE FINANCIAL and SCHALTBAU HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHALTBAU HOLDING 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 SCHALTBAU HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHALTBAU HOLDING has no effect on the direction of SUN LIFE i.e., SUN LIFE and SCHALTBAU HOLDING go up and down completely randomly.

Pair Corralation between SUN LIFE and SCHALTBAU HOLDING

Assuming the 90 days trading horizon SUN LIFE FINANCIAL is expected to generate 0.93 times more return on investment than SCHALTBAU HOLDING. However, SUN LIFE FINANCIAL is 1.07 times less risky than SCHALTBAU HOLDING. It trades about 0.06 of its potential returns per unit of risk. SCHALTBAU HOLDING is currently generating about 0.0 per unit of risk. If you would invest  5,650  in SUN LIFE FINANCIAL on October 24, 2024 and sell it today you would earn a total of  50.00  from holding SUN LIFE FINANCIAL or generate 0.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SUN LIFE FINANCIAL  vs.  SCHALTBAU HOLDING

SUN LIFE FINANCIAL

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SUN LIFE FINANCIAL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SUN LIFE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SCHALTBAU HOLDING

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCHALTBAU HOLDING are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SCHALTBAU HOLDING is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SUN LIFE and SCHALTBAU HOLDING

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

The idea behind SUN LIFE FINANCIAL and SCHALTBAU HOLDING 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.