Correlation Between Grupo Simec and Sun Life
Can any of the company-specific risk be diversified away by investing in both Grupo Simec 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 Grupo Simec and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Simec SAB and Sun Life Financial, you can compare the effects of market volatilities on Grupo Simec 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 Grupo Simec with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Sun Life.
Diversification Opportunities for Grupo Simec and Sun Life
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Sun is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB 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 Grupo Simec 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 Grupo Simec SAB 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 Grupo Simec i.e., Grupo Simec and Sun Life go up and down completely randomly.
Pair Corralation between Grupo Simec and Sun Life
Considering the 90-day investment horizon Grupo Simec SAB is expected to under-perform the Sun Life. In addition to that, Grupo Simec is 2.25 times more volatile than Sun Life Financial. It trades about -0.11 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.31 per unit of volatility. If you would invest 5,696 in Sun Life Financial on August 28, 2024 and sell it today you would earn a total of 455.00 from holding Sun Life Financial or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Simec SAB vs. Sun Life Financial
Performance |
| Timeline |
| Grupo Simec SAB |
| Sun Life Financial |
Grupo Simec and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Sun Life
The main advantage of trading using opposite Grupo Simec and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec 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.The idea behind Grupo Simec SAB and Sun Life Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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