Correlation Between SUN LIFE and Ipsen SA
Can any of the company-specific risk be diversified away by investing in both SUN LIFE and Ipsen SA 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 Ipsen SA 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 Ipsen SA, you can compare the effects of market volatilities on SUN LIFE and Ipsen SA 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 Ipsen SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN LIFE and Ipsen SA.
Diversification Opportunities for SUN LIFE and Ipsen SA
Very good diversification
The 3 months correlation between SUN and Ipsen is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SUN LIFE FINANCIAL and Ipsen SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ipsen SA 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 Ipsen SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ipsen SA has no effect on the direction of SUN LIFE i.e., SUN LIFE and Ipsen SA go up and down completely randomly.
Pair Corralation between SUN LIFE and Ipsen SA
Assuming the 90 days trading horizon SUN LIFE FINANCIAL is expected to under-perform the Ipsen SA. But the stock apears to be less risky and, when comparing its historical volatility, SUN LIFE FINANCIAL is 1.56 times less risky than Ipsen SA. The stock trades about -0.1 of its potential returns per unit of risk. The Ipsen SA is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 11,010 in Ipsen SA on November 2, 2024 and sell it today you would earn a total of 950.00 from holding Ipsen SA or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUN LIFE FINANCIAL vs. Ipsen SA
Performance |
| Timeline |
| SUN LIFE FINANCIAL |
| Ipsen SA |
SUN LIFE and Ipsen SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUN LIFE and Ipsen SA
The main advantage of trading using opposite SUN LIFE and Ipsen SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN LIFE position performs unexpectedly, Ipsen SA 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 Ipsen SA will offset losses from the drop in Ipsen SA's long position.| SUN LIFE vs. US FOODS HOLDING | SUN LIFE vs. Hemisphere Energy Corp | SUN LIFE vs. Wayside Technology Group | SUN LIFE vs. Iridium Communications |
| Ipsen SA vs. CDN IMPERIAL BANK | Ipsen SA vs. Webster Financial | Ipsen SA vs. G III Apparel Group | Ipsen SA vs. SUN LIFE FINANCIAL |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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