Correlation Between Sun Life and Atlantic Sapphire
Can any of the company-specific risk be diversified away by investing in both Sun Life and Atlantic Sapphire 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 Atlantic Sapphire 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 Atlantic Sapphire ASA, you can compare the effects of market volatilities on Sun Life and Atlantic Sapphire 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 Atlantic Sapphire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Atlantic Sapphire.
Diversification Opportunities for Sun Life and Atlantic Sapphire
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Atlantic is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Atlantic Sapphire ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Sapphire ASA 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 Atlantic Sapphire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Sapphire ASA has no effect on the direction of Sun Life i.e., Sun Life and Atlantic Sapphire go up and down completely randomly.
Pair Corralation between Sun Life and Atlantic Sapphire
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.16 times more return on investment than Atlantic Sapphire. However, Sun Life Financial is 6.18 times less risky than Atlantic Sapphire. It trades about -0.02 of its potential returns per unit of risk. Atlantic Sapphire ASA is currently generating about -0.42 per unit of risk. If you would invest 5,639 in Sun Life Financial on December 4, 2024 and sell it today you would lose (51.00) from holding Sun Life Financial or give up 0.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sun Life Financial vs. Atlantic Sapphire ASA
Performance |
Timeline |
Sun Life Financial |
Atlantic Sapphire ASA |
Sun Life and Atlantic Sapphire Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sun Life and Atlantic Sapphire
The main advantage of trading using opposite Sun Life and Atlantic Sapphire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Atlantic Sapphire 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 Atlantic Sapphire will offset losses from the drop in Atlantic Sapphire'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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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