Correlation Between Sun Life and NBCUNIVERSAL

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

Diversification Opportunities for Sun Life and NBCUNIVERSAL

-0.44

Correlation Coefficient

Sun Life  NBCUNIVERSAL

Very good diversification

The 3 months correlation between Sun and NBCUNIVERSAL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and NBCUNIVERSAL MEDIA LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBCUNIVERSAL MEDIA LLC 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 NBCUNIVERSAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBCUNIVERSAL MEDIA LLC has no effect on the direction of Sun Life i.e., Sun Life and NBCUNIVERSAL go up and down completely randomly.

Pair Corralation between Sun Life and NBCUNIVERSAL

Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.32 times more return on investment than NBCUNIVERSAL. However, Sun Life Financial is 3.09 times less risky than NBCUNIVERSAL. It trades about -0.22 of its potential returns per unit of risk. NBCUNIVERSAL MEDIA LLC is currently generating about -0.32 per unit of risk. If you would invest  6,170  in Sun Life Financial on October 1, 2024 and sell it today you would lose (222.00) from holding Sun Life Financial or give up 3.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	80.0%
Values	Daily Returns

Sun Life Financial  vs.  NBCUNIVERSAL MEDIA LLC

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.

NBCUNIVERSAL MEDIA LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NBCUNIVERSAL MEDIA LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NBCUNIVERSAL MEDIA LLC investors.

Pair Trading with Sun Life and NBCUNIVERSAL

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

The idea behind Sun Life Financial and NBCUNIVERSAL MEDIA LLC 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.