Correlation Between Compagnie Plastic and SUN LIFE
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic 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 Compagnie Plastic and SUN LIFE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and SUN LIFE FINANCIAL, you can compare the effects of market volatilities on Compagnie Plastic 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 Compagnie Plastic with a short position of SUN LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and SUN LIFE.
Diversification Opportunities for Compagnie Plastic and SUN LIFE
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Compagnie and SUN is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium 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 Compagnie Plastic 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 Compagnie Plastic Omnium 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 Compagnie Plastic i.e., Compagnie Plastic and SUN LIFE go up and down completely randomly.
Pair Corralation between Compagnie Plastic and SUN LIFE
Assuming the 90 days horizon Compagnie Plastic is expected to generate 1.8 times less return on investment than SUN LIFE. In addition to that, Compagnie Plastic is 2.44 times more volatile than SUN LIFE FINANCIAL. It trades about 0.04 of its total potential returns per unit of risk. SUN LIFE FINANCIAL is currently generating about 0.18 per unit of volatility. If you would invest 4,304 in SUN LIFE FINANCIAL on October 13, 2024 and sell it today you would earn a total of 1,346 from holding SUN LIFE FINANCIAL or generate 31.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. SUN LIFE FINANCIAL
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| SUN LIFE FINANCIAL |
Compagnie Plastic and SUN LIFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and SUN LIFE
The main advantage of trading using opposite Compagnie Plastic and SUN LIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic 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.| Compagnie Plastic vs. Strategic Education | Compagnie Plastic vs. Siamgas And Petrochemicals | Compagnie Plastic vs. betterU Education Corp | Compagnie Plastic vs. INDO RAMA SYNTHETIC |
| SUN LIFE vs. RCS MediaGroup SpA | SUN LIFE vs. ATRESMEDIA | SUN LIFE vs. Alaska Air Group | SUN LIFE vs. GigaMedia |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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