Correlation Between Sun Life and Herms International
Can any of the company-specific risk be diversified away by investing in both Sun Life and Herms International 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 Herms International 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 Herms International Socit, you can compare the effects of market volatilities on Sun Life and Herms International 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 Herms International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Herms International.
Diversification Opportunities for Sun Life and Herms International
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sun and Herms is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Herms International Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herms International Socit 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 Herms International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herms International Socit has no effect on the direction of Sun Life i.e., Sun Life and Herms International go up and down completely randomly.
Pair Corralation between Sun Life and Herms International
Assuming the 90 days horizon Sun Life Financial is expected to under-perform the Herms International. But the stock apears to be less risky and, when comparing its historical volatility, Sun Life Financial is 1.99 times less risky than Herms International. The stock trades about -0.12 of its potential returns per unit of risk. The Herms International Socit is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 203,600 in Herms International Socit on October 30, 2024 and sell it today you would earn a total of 60,400 from holding Herms International Socit or generate 29.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.37% |
| Values | Daily Returns |
Sun Life Financial vs. Herms International Socit
Performance |
| Timeline |
| Sun Life Financial |
| Herms International Socit |
Sun Life and Herms International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Herms International
The main advantage of trading using opposite Sun Life and Herms International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Herms International 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 Herms International will offset losses from the drop in Herms International's long position.| Sun Life vs. GALENA MINING LTD | Sun Life vs. SILICON LABORATOR | Sun Life vs. Warner Music Group | Sun Life vs. Silicon Motion Technology |
| Herms International vs. Park Hotels Resorts | Herms International vs. CompuGroup Medical SE | Herms International vs. NH HOTEL GROUP | Herms International vs. Japan Medical Dynamic |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |