Correlation Between HEIA and Sun Life
Can any of the company-specific risk be diversified away by investing in both HEIA 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 HEIA and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEIA and Sun Life Financial, you can compare the effects of market volatilities on HEIA 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 HEIA with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEIA and Sun Life.
Diversification Opportunities for HEIA and Sun Life
Very poor diversification
The 3 months correlation between HEIA and Sun is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding HEIA 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 HEIA 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 HEIA 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 HEIA i.e., HEIA and Sun Life go up and down completely randomly.
Pair Corralation between HEIA and Sun Life
If you would invest 5,100 in Sun Life Financial on August 25, 2024 and sell it today you would earn a total of 750.00 from holding Sun Life Financial or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 2.22% |
| Values | Daily Returns |
HEIA vs. Sun Life Financial
Performance |
| Timeline |
| HEIA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Sun Life Financial |
HEIA and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEIA and Sun Life
The main advantage of trading using opposite HEIA and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEIA 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.| HEIA vs. PT Bank Maybank | HEIA vs. National Bank Holdings | HEIA vs. OAKTRSPECLENDNEW | HEIA vs. The Hanover Insurance |
| Sun Life vs. Berkshire Hathaway | Sun Life vs. Zurich Insurance Group | Sun Life vs. Superior Plus Corp | Sun Life vs. NMI Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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