Correlation Between SUN LIFE and Broadridge Financial
Can any of the company-specific risk be diversified away by investing in both SUN LIFE and Broadridge Financial 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 SUN LIFE and Broadridge Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUN LIFE FINANCIAL and Broadridge Financial Solutions, you can compare the effects of market volatilities on SUN LIFE and Broadridge Financial 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 SUN LIFE with a short position of Broadridge Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN LIFE and Broadridge Financial.
Diversification Opportunities for SUN LIFE and Broadridge Financial
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SUN and Broadridge is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding SUN LIFE FINANCIAL and Broadridge Financial Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadridge Financial and SUN LIFE 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 SUN LIFE FINANCIAL are associated (or correlated) with Broadridge Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadridge Financial has no effect on the direction of SUN LIFE i.e., SUN LIFE and Broadridge Financial go up and down completely randomly.
Pair Corralation between SUN LIFE and Broadridge Financial
Assuming the 90 days trading horizon SUN LIFE FINANCIAL is expected to under-perform the Broadridge Financial. But the stock apears to be less risky and, when comparing its historical volatility, SUN LIFE FINANCIAL is 1.42 times less risky than Broadridge Financial. The stock trades about -0.1 of its potential returns per unit of risk. The Broadridge Financial Solutions is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 21,800 in Broadridge Financial Solutions on October 26, 2024 and sell it today you would earn a total of 600.00 from holding Broadridge Financial Solutions or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUN LIFE FINANCIAL vs. Broadridge Financial Solutions
Performance |
| Timeline |
| SUN LIFE FINANCIAL |
| Broadridge Financial |
SUN LIFE and Broadridge Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUN LIFE and Broadridge Financial
The main advantage of trading using opposite SUN LIFE and Broadridge Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN LIFE position performs unexpectedly, Broadridge Financial 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 Broadridge Financial will offset losses from the drop in Broadridge Financial's long position.| SUN LIFE vs. ANTA SPORTS PRODUCT | SUN LIFE vs. DALATA HOTEL | SUN LIFE vs. PENN Entertainment | SUN LIFE vs. RCS MediaGroup SpA |
| Broadridge Financial vs. SUN LIFE FINANCIAL | Broadridge Financial vs. ARDAGH METAL PACDL 0001 | Broadridge Financial vs. Harmony Gold Mining | Broadridge Financial vs. Perseus Mining Limited |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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