Correlation Between Hartford Financial and Sun Life
Can any of the company-specific risk be diversified away by investing in both Hartford Financial 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 Hartford Financial and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Financial Services and Sun Life Financial, you can compare the effects of market volatilities on Hartford Financial 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 Hartford Financial with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Financial and Sun Life.
Diversification Opportunities for Hartford Financial and Sun Life
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hartford and Sun is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Financial Services 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 Hartford Financial 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 Hartford Financial Services 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 Hartford Financial i.e., Hartford Financial and Sun Life go up and down completely randomly.
Pair Corralation between Hartford Financial and Sun Life
Considering the 90-day investment horizon Hartford Financial Services is expected to generate 1.25 times more return on investment than Sun Life. However, Hartford Financial is 1.25 times more volatile than Sun Life Financial. It trades about 0.09 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.06 per unit of risk. If you would invest 7,249 in Hartford Financial Services on August 27, 2024 and sell it today you would earn a total of 4,903 from holding Hartford Financial Services or generate 67.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Financial Services vs. Sun Life Financial
Performance |
| Timeline |
| Hartford Financial |
| Sun Life Financial |
Hartford Financial and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Financial and Sun Life
The main advantage of trading using opposite Hartford Financial and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Financial 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.| Hartford Financial vs. Goosehead Insurance | Hartford Financial vs. International General Insurance | Hartford Financial vs. Enstar Group Limited | Hartford Financial vs. Arch Capital Group |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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