Correlation Between Sun Life and Bet-at-home

Can any of the company-specific risk be diversified away by investing in both Sun Life and Bet-at-home 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 Bet-at-home 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 bet at home AG, you can compare the effects of market volatilities on Sun Life and Bet-at-home 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 Bet-at-home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Bet-at-home.

Diversification Opportunities for Sun Life and Bet-at-home

-0.94

Correlation Coefficient

Sun Life  Bet-at-home

Pay attention - limited upside

The 3 months correlation between Sun and Bet-at-home is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and bet at home AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on bet at home 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 Bet-at-home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of bet at home has no effect on the direction of Sun Life i.e., Sun Life and Bet-at-home go up and down completely randomly.

Pair Corralation between Sun Life and Bet-at-home

Assuming the 90 days horizon Sun Life Financial is expected to generate 0.43 times more return on investment than Bet-at-home. However, Sun Life Financial is 2.32 times less risky than Bet-at-home. It trades about 0.16 of its potential returns per unit of risk. bet at home AG is currently generating about -0.12 per unit of risk. If you would invest  5,125  in Sun Life Financial on October 9, 2024 and sell it today you would earn a total of  575.00  from holding Sun Life Financial or generate 11.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Sun Life Financial  vs.  bet at home AG

Sun Life Financial

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Sun Life may actually be approaching a critical reversion point that can send shares even higher in February 2025.

bet at home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days bet at home AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Sun Life and Bet-at-home

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

The idea behind Sun Life Financial and bet at home AG 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.