Correlation Between NN Group and Sun Life
Can any of the company-specific risk be diversified away by investing in both NN Group 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 NN Group and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NN Group NV and Sun Life Financial, you can compare the effects of market volatilities on NN Group 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 NN Group with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and Sun Life.
Diversification Opportunities for NN Group and Sun Life
Excellent diversification
The 3 months correlation between NNGPF and Sun is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV 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 NN Group 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 NN Group NV 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 NN Group i.e., NN Group and Sun Life go up and down completely randomly.
Pair Corralation between NN Group and Sun Life
Assuming the 90 days horizon NN Group NV is expected to generate 5.21 times more return on investment than Sun Life. However, NN Group is 5.21 times more volatile than Sun Life Financial. It trades about 0.04 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.07 per unit of risk. If you would invest 3,666 in NN Group NV on September 2, 2024 and sell it today you would earn a total of 938.00 from holding NN Group NV or generate 25.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 79.44% |
| Values | Daily Returns |
NN Group NV vs. Sun Life Financial
Performance |
| Timeline |
| NN Group NV |
| Sun Life Financial |
NN Group and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NN Group and Sun Life
The main advantage of trading using opposite NN Group and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group 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.| NN Group vs. NN Group NV | NN Group vs. Swiss Life Holding | NN Group vs. PICC Property and | NN Group vs. AXA SA |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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