Correlation Between Sun Life and Bilfinger
Can any of the company-specific risk be diversified away by investing in both Sun Life and Bilfinger 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 Bilfinger 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 Bilfinger SE, you can compare the effects of market volatilities on Sun Life and Bilfinger 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 Bilfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Bilfinger.
Diversification Opportunities for Sun Life and Bilfinger
Very good diversification
The 3 months correlation between Sun and Bilfinger is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Bilfinger SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilfinger SE 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 Bilfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilfinger SE has no effect on the direction of Sun Life i.e., Sun Life and Bilfinger go up and down completely randomly.
Pair Corralation between Sun Life and Bilfinger
Assuming the 90 days horizon Sun Life Financial is expected to generate 0.57 times more return on investment than Bilfinger. However, Sun Life Financial is 1.75 times less risky than Bilfinger. It trades about 0.21 of its potential returns per unit of risk. Bilfinger SE is currently generating about -0.04 per unit of risk. If you would invest 5,175 in Sun Life Financial on September 13, 2024 and sell it today you would earn a total of 625.00 from holding Sun Life Financial or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Sun Life Financial vs. Bilfinger SE
Performance |
| Timeline |
| Sun Life Financial |
| Bilfinger SE |
Sun Life and Bilfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Bilfinger
The main advantage of trading using opposite Sun Life and Bilfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Bilfinger 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 Bilfinger will offset losses from the drop in Bilfinger's long position.| Sun Life vs. Playa Hotels Resorts | Sun Life vs. PLAYTIKA HOLDING DL 01 | Sun Life vs. KOOL2PLAY SA ZY | Sun Life vs. Singapore Airlines Limited |
| Bilfinger vs. Sumitomo Rubber Industries | Bilfinger vs. Summit Materials | Bilfinger vs. Eagle Materials | Bilfinger vs. Mitsubishi Materials |
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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