Correlation Between Fundamental Global and Sun Life
Can any of the company-specific risk be diversified away by investing in both Fundamental Global 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 Fundamental Global and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundamental Global and Sun Life Financial, you can compare the effects of market volatilities on Fundamental Global 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 Fundamental Global with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Global and Sun Life.
Diversification Opportunities for Fundamental Global and Sun Life
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fundamental and Sun is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Global 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 Fundamental Global 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 Fundamental Global 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 Fundamental Global i.e., Fundamental Global and Sun Life go up and down completely randomly.
Pair Corralation between Fundamental Global and Sun Life
Considering the 90-day investment horizon Fundamental Global is expected to generate 11.73 times more return on investment than Sun Life. However, Fundamental Global is 11.73 times more volatile than Sun Life Financial. It trades about 0.15 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.3 per unit of risk. If you would invest 2,400 in Fundamental Global on August 24, 2024 and sell it today you would earn a total of 700.00 from holding Fundamental Global or generate 29.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundamental Global vs. Sun Life Financial
Performance |
| Timeline |
| Fundamental Global |
| Sun Life Financial |
Fundamental Global and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Global and Sun Life
The main advantage of trading using opposite Fundamental Global and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Global 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.| Fundamental Global vs. Global Indemnity PLC | Fundamental Global vs. Erie Indemnity | Fundamental Global vs. AMERISAFE | Fundamental Global vs. Diamond Hill Investment |
| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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