Correlation Between Sealed Air and Sun Life
Can any of the company-specific risk be diversified away by investing in both Sealed Air 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 Sealed Air and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Sun Life Financial, you can compare the effects of market volatilities on Sealed Air 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 Sealed Air with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Sun Life.
Diversification Opportunities for Sealed Air and Sun Life
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sealed and Sun is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air 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 Sealed Air 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 Sealed Air 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 Sealed Air i.e., Sealed Air and Sun Life go up and down completely randomly.
Pair Corralation between Sealed Air and Sun Life
Considering the 90-day investment horizon Sealed Air is expected to generate 8.22 times less return on investment than Sun Life. In addition to that, Sealed Air is 1.43 times more volatile than Sun Life Financial. It trades about 0.04 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.52 per unit of volatility. If you would invest 5,488 in Sun Life Financial on September 1, 2024 and sell it today you would earn a total of 651.00 from holding Sun Life Financial or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. Sun Life Financial
Performance |
| Timeline |
| Sealed Air |
| Sun Life Financial |
Sealed Air and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Sun Life
The main advantage of trading using opposite Sealed Air and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air 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.| Sealed Air vs. Packaging Corp of | Sealed Air vs. O I Glass | Sealed Air vs. Silgan Holdings | Sealed Air vs. International Paper |
| Sun Life vs. Hartford Financial Services | Sun Life vs. Goosehead Insurance | Sun Life vs. International General Insurance | Sun Life vs. Enstar Group Limited |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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