Correlation Between Sun Life and SVELEV

Can any of the company-specific risk be diversified away by investing in both Sun Life and SVELEV 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 SVELEV 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 SVELEV 28 10 FEB 51, you can compare the effects of market volatilities on Sun Life and SVELEV 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 SVELEV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and SVELEV.

Diversification Opportunities for Sun Life and SVELEV

-0.56

Correlation Coefficient

Sun Life  SVELEV

Excellent diversification

The 3 months correlation between Sun and SVELEV is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and SVELEV 28 10 FEB 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVELEV 28 10 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 SVELEV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVELEV 28 10 has no effect on the direction of Sun Life i.e., Sun Life and SVELEV go up and down completely randomly.

Pair Corralation between Sun Life and SVELEV

Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.81 times more return on investment than SVELEV. However, Sun Life Financial is 1.23 times less risky than SVELEV. It trades about 0.14 of its potential returns per unit of risk. SVELEV 28 10 FEB 51 is currently generating about -0.04 per unit of risk. If you would invest  5,597  in Sun Life Financial on September 14, 2024 and sell it today you would earn a total of  449.00  from holding Sun Life Financial or generate 8.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Sun Life Financial  vs.  SVELEV 28 10 FEB 51

Sun Life Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, Sun Life may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SVELEV 28 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SVELEV 28 10 FEB 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SVELEV 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 SVELEV

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

The idea behind Sun Life Financial and SVELEV 28 10 FEB 51 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.