Correlation Between Sun Life and Mainstreet Equity
Can any of the company-specific risk be diversified away by investing in both Sun Life and Mainstreet Equity 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 Sun Life and Mainstreet Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Life Financial and Mainstreet Equity Corp, you can compare the effects of market volatilities on Sun Life and Mainstreet Equity 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 Sun Life with a short position of Mainstreet Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Mainstreet Equity.
Diversification Opportunities for Sun Life and Mainstreet Equity
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and Mainstreet is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Mainstreet Equity Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstreet Equity Corp and Sun Life 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 Sun Life Financial are associated (or correlated) with Mainstreet Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstreet Equity Corp has no effect on the direction of Sun Life i.e., Sun Life and Mainstreet Equity go up and down completely randomly.
Pair Corralation between Sun Life and Mainstreet Equity
Assuming the 90 days trading horizon Sun Life Financial is expected to under-perform the Mainstreet Equity. But the preferred stock apears to be less risky and, when comparing its historical volatility, Sun Life Financial is 1.69 times less risky than Mainstreet Equity. The preferred stock trades about -0.03 of its potential returns per unit of risk. The Mainstreet Equity Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 19,497 in Mainstreet Equity Corp on August 26, 2024 and sell it today you would earn a total of 854.00 from holding Mainstreet Equity Corp or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Mainstreet Equity Corp
Performance |
| Timeline |
| Sun Life Financial |
| Mainstreet Equity Corp |
Sun Life and Mainstreet Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Mainstreet Equity
The main advantage of trading using opposite Sun Life and Mainstreet Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Mainstreet Equity 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 Mainstreet Equity will offset losses from the drop in Mainstreet Equity's long position.| Sun Life vs. Sun Life Financial | Sun Life vs. Forstrong Global Income | Sun Life vs. BMO Aggregate Bond | Sun Life vs. Terreno Resources Corp |
| Mainstreet Equity vs. Morguard | Mainstreet Equity vs. Melcor Developments | Mainstreet Equity vs. Boardwalk Real Estate | Mainstreet Equity vs. Genesis Land Development |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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