Correlation Between Sun Life and AECOM TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Sun Life and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY, you can compare the effects of market volatilities on Sun Life and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and AECOM TECHNOLOGY.
Diversification Opportunities for Sun Life and AECOM TECHNOLOGY
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sun and AECOM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of Sun Life i.e., Sun Life and AECOM TECHNOLOGY go up and down completely randomly.
Pair Corralation between Sun Life and AECOM TECHNOLOGY
Assuming the 90 days horizon Sun Life Financial is expected to under-perform the AECOM TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, Sun Life Financial is 1.31 times less risky than AECOM TECHNOLOGY. The stock trades about -0.22 of its potential returns per unit of risk. The AECOM TECHNOLOGY is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 10,573 in AECOM TECHNOLOGY on October 16, 2024 and sell it today you would lose (273.00) from holding AECOM TECHNOLOGY or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. AECOM TECHNOLOGY
Performance |
| Timeline |
| Sun Life Financial |
| AECOM TECHNOLOGY |
Sun Life and AECOM TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and AECOM TECHNOLOGY
The main advantage of trading using opposite Sun Life and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, AECOM TECHNOLOGY 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.| Sun Life vs. QUEEN S ROAD | Sun Life vs. Nishi Nippon Railroad Co | Sun Life vs. COPLAND ROAD CAPITAL | Sun Life vs. Warner Music Group |
| AECOM TECHNOLOGY vs. Federal Agricultural Mortgage | AECOM TECHNOLOGY vs. WIMFARM SA EO | AECOM TECHNOLOGY vs. SLR Investment Corp | AECOM TECHNOLOGY vs. Guangdong Investment 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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