Correlation Between Sun Life and REVLTNRY CNCPT
Can any of the company-specific risk be diversified away by investing in both Sun Life and REVLTNRY CNCPT 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 REVLTNRY CNCPT 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 REVLTNRY CNCPT, you can compare the effects of market volatilities on Sun Life and REVLTNRY CNCPT 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 REVLTNRY CNCPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and REVLTNRY CNCPT.
Diversification Opportunities for Sun Life and REVLTNRY CNCPT
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sun and REVLTNRY is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and REVLTNRY CNCPT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVLTNRY CNCPT 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 REVLTNRY CNCPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVLTNRY CNCPT has no effect on the direction of Sun Life i.e., Sun Life and REVLTNRY CNCPT go up and down completely randomly.
Pair Corralation between Sun Life and REVLTNRY CNCPT
Assuming the 90 days horizon Sun Life is expected to generate 117.85 times less return on investment than REVLTNRY CNCPT. But when comparing it to its historical volatility, Sun Life Financial is 86.66 times less risky than REVLTNRY CNCPT. It trades about 0.07 of its potential returns per unit of risk. REVLTNRY CNCPT is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8.70 in REVLTNRY CNCPT on October 12, 2024 and sell it today you would lose (8.20) from holding REVLTNRY CNCPT or give up 94.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sun Life Financial vs. REVLTNRY CNCPT
Performance |
| Timeline |
| Sun Life Financial |
| REVLTNRY CNCPT |
Sun Life and REVLTNRY CNCPT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and REVLTNRY CNCPT
The main advantage of trading using opposite Sun Life and REVLTNRY CNCPT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, REVLTNRY CNCPT 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 REVLTNRY CNCPT will offset losses from the drop in REVLTNRY CNCPT'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 |
| REVLTNRY CNCPT vs. TITANIUM TRANSPORTGROUP | REVLTNRY CNCPT vs. SAFEROADS HLDGS | REVLTNRY CNCPT vs. Gold Road Resources | REVLTNRY CNCPT vs. Astral Foods Limited |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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