Correlation Between Sun Life and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both Sun Life and Apollo Investment 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 Apollo Investment 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 Apollo Investment Corp, you can compare the effects of market volatilities on Sun Life and Apollo Investment 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 Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Apollo Investment.
Diversification Opportunities for Sun Life and Apollo Investment
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sun and Apollo is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp 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 Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of Sun Life i.e., Sun Life and Apollo Investment go up and down completely randomly.
Pair Corralation between Sun Life and Apollo Investment
Assuming the 90 days horizon Sun Life is expected to generate 13.11 times less return on investment than Apollo Investment. In addition to that, Sun Life is 1.06 times more volatile than Apollo Investment Corp. It trades about 0.01 of its total potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.09 per unit of volatility. If you would invest 1,286 in Apollo Investment Corp on November 3, 2024 and sell it today you would earn a total of 34.00 from holding Apollo Investment Corp or generate 2.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Apollo Investment Corp
Performance |
| Timeline |
| Sun Life Financial |
| Apollo Investment Corp |
Sun Life and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Apollo Investment
The main advantage of trading using opposite Sun Life and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Apollo Investment 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 Apollo Investment will offset losses from the drop in Apollo Investment's long position.| Sun Life vs. Insurance Australia Group | Sun Life vs. United Rentals | Sun Life vs. QBE Insurance Group | Sun Life vs. Direct Line Insurance |
| Apollo Investment vs. Morgan Stanley | Apollo Investment vs. Morgan Stanley | Apollo Investment vs. The Charles Schwab | Apollo Investment vs. The Goldman Sachs |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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