Correlation Between Sun Life and Sysco

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

Diversification Opportunities for Sun Life and Sysco

0.69

Correlation Coefficient

Sun Life  Sysco

Poor diversification

The 3 months correlation between Sun and Sysco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Sysco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco 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 Sysco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco has no effect on the direction of Sun Life i.e., Sun Life and Sysco go up and down completely randomly.

Pair Corralation between Sun Life and Sysco

Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.65 times more return on investment than Sysco. However, Sun Life Financial is 1.54 times less risky than Sysco. It trades about -0.02 of its potential returns per unit of risk. Sysco is currently generating about -0.07 per unit of risk. If you would invest  5,899  in Sun Life Financial on October 10, 2024 and sell it today you would lose (47.00) from holding Sun Life Financial or give up 0.8% of portfolio value over 90 days.

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

Sun Life Financial  vs.  Sysco

Sun Life Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Sun Life is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Sysco

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sysco are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Sysco is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sun Life and Sysco

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

The idea behind Sun Life Financial and Sysco 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.