Correlation Between SUN LIFE and CryoLife
Can any of the company-specific risk be diversified away by investing in both SUN LIFE and CryoLife 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 CryoLife 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 CryoLife, you can compare the effects of market volatilities on SUN LIFE and CryoLife 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 CryoLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN LIFE and CryoLife.
Diversification Opportunities for SUN LIFE and CryoLife
Very weak diversification
The 3 months correlation between SUN and CryoLife is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SUN LIFE FINANCIAL and CryoLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoLife 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 CryoLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoLife has no effect on the direction of SUN LIFE i.e., SUN LIFE and CryoLife go up and down completely randomly.
Pair Corralation between SUN LIFE and CryoLife
Assuming the 90 days trading horizon SUN LIFE is expected to generate 2.55 times less return on investment than CryoLife. But when comparing it to its historical volatility, SUN LIFE FINANCIAL is 1.66 times less risky than CryoLife. It trades about 0.05 of its potential returns per unit of risk. CryoLife is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,290 in CryoLife on October 25, 2024 and sell it today you would earn a total of 1,650 from holding CryoLife or generate 127.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUN LIFE FINANCIAL vs. CryoLife
Performance |
| Timeline |
| SUN LIFE FINANCIAL |
| CryoLife |
SUN LIFE and CryoLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUN LIFE and CryoLife
The main advantage of trading using opposite SUN LIFE and CryoLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN LIFE position performs unexpectedly, CryoLife 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 CryoLife will offset losses from the drop in CryoLife'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 |
| CryoLife vs. BANK OF CHINA | CryoLife vs. SUN LIFE FINANCIAL | CryoLife vs. United Insurance Holdings | CryoLife vs. AGNC INVESTMENT |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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