Correlation Between Mechel OAO and Sun Life
Can any of the company-specific risk be diversified away by investing in both Mechel OAO 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 Mechel OAO and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mechel OAO and Sun Life Financial, you can compare the effects of market volatilities on Mechel OAO 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 Mechel OAO with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechel OAO and Sun Life.
Diversification Opportunities for Mechel OAO and Sun Life
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mechel and Sun is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mechel OAO 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 Mechel OAO 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 Mechel OAO 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 Mechel OAO i.e., Mechel OAO and Sun Life go up and down completely randomly.
Pair Corralation between Mechel OAO and Sun Life
If you would invest 4,902 in Sun Life Financial on September 14, 2024 and sell it today you would earn a total of 1,118 from holding Sun Life Financial or generate 22.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Mechel OAO vs. Sun Life Financial
Performance |
| Timeline |
| Mechel OAO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sun Life Financial |
Mechel OAO and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mechel OAO and Sun Life
The main advantage of trading using opposite Mechel OAO and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mechel OAO 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.| Mechel OAO vs. RadNet Inc | Mechel OAO vs. Lipocine | Mechel OAO vs. Pinterest | Mechel OAO vs. Sphere Entertainment Co |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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