Correlation Between Sun Life and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both Sun Life and ZhongAn Online 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 ZhongAn Online 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 ZhongAn Online P, you can compare the effects of market volatilities on Sun Life and ZhongAn Online 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 ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and ZhongAn Online.
Diversification Opportunities for Sun Life and ZhongAn Online
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and ZhongAn is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P 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 ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Sun Life i.e., Sun Life and ZhongAn Online go up and down completely randomly.
Pair Corralation between Sun Life and ZhongAn Online
Assuming the 90 days horizon Sun Life Financial is expected to generate 0.31 times more return on investment than ZhongAn Online. However, Sun Life Financial is 3.19 times less risky than ZhongAn Online. It trades about 0.07 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.03 per unit of risk. If you would invest 3,932 in Sun Life Financial on October 12, 2024 and sell it today you would earn a total of 1,718 from holding Sun Life Financial or generate 43.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. ZhongAn Online P
Performance |
| Timeline |
| Sun Life Financial |
| ZhongAn Online P |
Sun Life and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and ZhongAn Online
The main advantage of trading using opposite Sun Life and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.| Sun Life vs. QINGCI GAMES INC | Sun Life vs. Scientific Games | Sun Life vs. International Game Technology | Sun Life vs. GAMING FAC SA |
| ZhongAn Online vs. Direct Line Insurance | ZhongAn Online vs. BE Semiconductor Industries | ZhongAn Online vs. Tower Semiconductor | ZhongAn Online 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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