Correlation Between International General and Sun Life
Can any of the company-specific risk be diversified away by investing in both International General 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 International General and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International General Insurance and Sun Life Financial, you can compare the effects of market volatilities on International General 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 International General with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of International General and Sun Life.
Diversification Opportunities for International General and Sun Life
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Sun is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding International General Insuranc 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 International General 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 International General Insurance 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 International General i.e., International General and Sun Life go up and down completely randomly.
Pair Corralation between International General and Sun Life
Given the investment horizon of 90 days International General Insurance is expected to generate 2.64 times more return on investment than Sun Life. However, International General is 2.64 times more volatile than Sun Life Financial. It trades about 0.47 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.31 per unit of risk. If you would invest 1,911 in International General Insurance on August 24, 2024 and sell it today you would earn a total of 691.00 from holding International General Insurance or generate 36.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International General Insuranc vs. Sun Life Financial
Performance |
| Timeline |
| International General |
| Sun Life Financial |
International General and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International General and Sun Life
The main advantage of trading using opposite International General and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International General 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.| International General vs. Enstar Group Limited | International General vs. Axa Equitable Holdings | International General vs. Arch Capital Group | International General vs. Waterdrop ADR |
| Sun Life vs. Hartford Financial Services | Sun Life vs. Enstar Group Limited | Sun Life vs. American International Group | Sun Life vs. Axa Equitable 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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