Correlation Between Sun Life and 51Talk Online
Can any of the company-specific risk be diversified away by investing in both Sun Life and 51Talk Online 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 51Talk Online 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 51Talk Online Education, you can compare the effects of market volatilities on Sun Life and 51Talk Online 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 51Talk Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and 51Talk Online.
Diversification Opportunities for Sun Life and 51Talk Online
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and 51Talk is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and 51Talk Online Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 51Talk Online Education 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 51Talk Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 51Talk Online Education has no effect on the direction of Sun Life i.e., Sun Life and 51Talk Online go up and down completely randomly.
Pair Corralation between Sun Life and 51Talk Online
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.3 times more return on investment than 51Talk Online. However, Sun Life Financial is 3.34 times less risky than 51Talk Online. It trades about -0.02 of its potential returns per unit of risk. 51Talk Online Education is currently generating about -0.13 per unit of risk. If you would invest 5,639 in Sun Life Financial on December 5, 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 Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sun Life Financial vs. 51Talk Online Education
Performance |
Timeline |
Sun Life Financial |
51Talk Online Education |
Sun Life and 51Talk Online Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sun Life and 51Talk Online
The main advantage of trading using opposite Sun Life and 51Talk Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, 51Talk Online 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 51Talk Online will offset losses from the drop in 51Talk Online'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 |
51Talk Online vs. Wah Fu Education | 51Talk Online vs. Four Seasons Education | 51Talk Online vs. Sunlands Technology Group | 51Talk Online vs. China Liberal Education |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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