Correlation Between Marine Products and Sun Life
Can any of the company-specific risk be diversified away by investing in both Marine Products and Sun Life 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 Marine Products and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and Sun Life Financial, you can compare the effects of market volatilities on Marine Products and Sun Life 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 Marine Products with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Sun Life.
Diversification Opportunities for Marine Products and Sun Life
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marine and Sun is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial and Marine Products 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 Marine Products are associated (or correlated) with Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Marine Products i.e., Marine Products and Sun Life go up and down completely randomly.
Pair Corralation between Marine Products and Sun Life
Considering the 90-day investment horizon Marine Products is expected to generate 1.65 times less return on investment than Sun Life. In addition to that, Marine Products is 1.67 times more volatile than Sun Life Financial. It trades about 0.18 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.5 per unit of volatility. If you would invest 5,506 in Sun Life Financial on September 2, 2024 and sell it today you would earn a total of 633.00 from holding Sun Life Financial or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Products vs. Sun Life Financial
Performance |
| Timeline |
| Marine Products |
| Sun Life Financial |
Marine Products and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Products and Sun Life
The main advantage of trading using opposite Marine Products and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Marine Products vs. LCI Industries | Marine Products vs. MCBC Holdings | Marine Products vs. Winnebago Industries | Marine Products vs. Thor Industries |
| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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