Correlation Between Sun Life and BOSTON BEER
Can any of the company-specific risk be diversified away by investing in both Sun Life and BOSTON BEER 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 BOSTON BEER 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 BOSTON BEER A , you can compare the effects of market volatilities on Sun Life and BOSTON BEER 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 BOSTON BEER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and BOSTON BEER.
Diversification Opportunities for Sun Life and BOSTON BEER
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sun and BOSTON is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and BOSTON BEER A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOSTON BEER A 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 BOSTON BEER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOSTON BEER A has no effect on the direction of Sun Life i.e., Sun Life and BOSTON BEER go up and down completely randomly.
Pair Corralation between Sun Life and BOSTON BEER
Assuming the 90 days horizon Sun Life Financial is expected to generate 0.55 times more return on investment than BOSTON BEER. However, Sun Life Financial is 1.82 times less risky than BOSTON BEER. It trades about 0.07 of its potential returns per unit of risk. BOSTON BEER A is currently generating about -0.01 per unit of risk. If you would invest 3,932 in Sun Life Financial on October 13, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. BOSTON BEER A
Performance |
| Timeline |
| Sun Life Financial |
| BOSTON BEER A |
Sun Life and BOSTON BEER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and BOSTON BEER
The main advantage of trading using opposite Sun Life and BOSTON BEER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, BOSTON BEER 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 BOSTON BEER will offset losses from the drop in BOSTON BEER's long position.| Sun Life vs. Global Ship Lease | Sun Life vs. Apollo Investment Corp | Sun Life vs. GRENKELEASING Dusseldorf | Sun Life vs. INTERSHOP Communications Aktiengesellschaft |
| BOSTON BEER vs. Ameriprise Financial | BOSTON BEER vs. Sun Life Financial | BOSTON BEER vs. Synchrony Financial | BOSTON BEER vs. SYSTEMAIR AB |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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