Correlation Between Global Ship and Sun Life
Can any of the company-specific risk be diversified away by investing in both Global Ship and Sun Life 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 Global Ship and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and Sun Life Financial, you can compare the effects of market volatilities on Global Ship and Sun Life 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 Global Ship with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Sun Life.
Diversification Opportunities for Global Ship and Sun Life
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Sun is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial and Global Ship 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 Global Ship Lease are associated (or correlated) with Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Global Ship i.e., Global Ship and Sun Life go up and down completely randomly.
Pair Corralation between Global Ship and Sun Life
Assuming the 90 days horizon Global Ship Lease is expected to generate 1.62 times more return on investment than Sun Life. However, Global Ship is 1.62 times more volatile than Sun Life Financial. It trades about 0.06 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.07 per unit of risk. If you would invest 1,407 in Global Ship Lease on October 14, 2024 and sell it today you would earn a total of 745.00 from holding Global Ship Lease or generate 52.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Sun Life Financial
Performance |
| Timeline |
| Global Ship Lease |
| Sun Life Financial |
Global Ship and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Sun Life
The main advantage of trading using opposite Global Ship and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Global Ship vs. VULCAN MATERIALS | Global Ship vs. Sumitomo Rubber Industries | Global Ship vs. Q2M Managementberatung AG | Global Ship vs. Corporate Travel Management |
| Sun Life vs. Global Ship Lease | Sun Life vs. Apollo Investment Corp | Sun Life vs. GRENKELEASING Dusseldorf | Sun Life vs. INTERSHOP Communications Aktiengesellschaft |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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