Correlation Between Sun Life and Identiv
Can any of the company-specific risk be diversified away by investing in both Sun Life and Identiv 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 Identiv 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 Identiv, you can compare the effects of market volatilities on Sun Life and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Identiv.
Diversification Opportunities for Sun Life and Identiv
Very poor diversification
The 3 months correlation between Sun and Identiv is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Sun Life i.e., Sun Life and Identiv go up and down completely randomly.
Pair Corralation between Sun Life and Identiv
Assuming the 90 days horizon Sun Life Financial is expected to generate 0.27 times more return on investment than Identiv. However, Sun Life Financial is 3.71 times less risky than Identiv. It trades about 0.07 of its potential returns per unit of risk. Identiv is currently generating about -0.01 per unit of risk. If you would invest 3,949 in Sun Life Financial on October 11, 2024 and sell it today you would earn a total of 1,751 from holding Sun Life Financial or generate 44.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Identiv
Performance |
| Timeline |
| Sun Life Financial |
| Identiv |
Sun Life and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Identiv
The main advantage of trading using opposite Sun Life and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| Sun Life vs. Zurich Insurance Group | Sun Life vs. Superior Plus Corp | Sun Life vs. NMI Holdings | Sun Life vs. SIVERS SEMICONDUCTORS AB |
| Identiv vs. VIRGIN WINES UK | Identiv vs. VARIOUS EATERIES LS | Identiv vs. Sun Life Financial | Identiv vs. Darden Restaurants |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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