Correlation Between Sun Life and Pure Storage
Can any of the company-specific risk be diversified away by investing in both Sun Life and Pure Storage 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 Pure Storage 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 Pure Storage, you can compare the effects of market volatilities on Sun Life and Pure Storage 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 Pure Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Pure Storage.
Diversification Opportunities for Sun Life and Pure Storage
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sun and Pure is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Pure Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Storage 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 Pure Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Storage has no effect on the direction of Sun Life i.e., Sun Life and Pure Storage go up and down completely randomly.
Pair Corralation between Sun Life and Pure Storage
Assuming the 90 days horizon Sun Life Financial is expected to generate 0.54 times more return on investment than Pure Storage. However, Sun Life Financial is 1.87 times less risky than Pure Storage. It trades about 0.29 of its potential returns per unit of risk. Pure Storage is currently generating about 0.06 per unit of risk. If you would invest 5,250 in Sun Life Financial on August 29, 2024 and sell it today you would earn a total of 600.00 from holding Sun Life Financial or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Pure Storage
Performance |
| Timeline |
| Sun Life Financial |
| Pure Storage |
Sun Life and Pure Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Pure Storage
The main advantage of trading using opposite Sun Life and Pure Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Pure Storage 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 Pure Storage will offset losses from the drop in Pure Storage's long position.| Sun Life vs. Pure Storage | Sun Life vs. Science Applications International | Sun Life vs. SBA Communications Corp | Sun Life vs. Public Storage |
| Pure Storage vs. Perdoceo Education | Pure Storage vs. Iridium Communications | Pure Storage vs. Ribbon Communications | Pure Storage vs. COMPUTERSHARE |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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