Correlation Between Sun Life and Allhome Corp
Can any of the company-specific risk be diversified away by investing in both Sun Life and Allhome Corp 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 Allhome Corp 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 Allhome Corp, you can compare the effects of market volatilities on Sun Life and Allhome Corp 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 Allhome Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Allhome Corp.
Diversification Opportunities for Sun Life and Allhome Corp
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sun and Allhome is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Allhome Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allhome 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 Allhome Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allhome Corp has no effect on the direction of Sun Life i.e., Sun Life and Allhome Corp go up and down completely randomly.
Pair Corralation between Sun Life and Allhome Corp
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 0.93 times more return on investment than Allhome Corp. However, Sun Life Financial is 1.07 times less risky than Allhome Corp. It trades about 0.06 of its potential returns per unit of risk. Allhome Corp is currently generating about -0.03 per unit of risk. If you would invest 227,928 in Sun Life Financial on September 4, 2024 and sell it today you would earn a total of 131,872 from holding Sun Life Financial or generate 57.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.5% |
| Values | Daily Returns |
Sun Life Financial vs. Allhome Corp
Performance |
| Timeline |
| Sun Life Financial |
| Allhome Corp |
Sun Life and Allhome Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Allhome Corp
The main advantage of trading using opposite Sun Life and Allhome Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Allhome Corp 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 Allhome Corp will offset losses from the drop in Allhome Corp's long position.| Sun Life vs. Manulife Financial Corp | Sun Life vs. GT Capital Holdings | Sun Life vs. Allhome Corp | Sun Life vs. Jollibee Foods Corp |
| Allhome Corp vs. GT Capital Holdings | Allhome Corp vs. Jollibee Foods Corp | Allhome Corp vs. LFM Properties Corp | Allhome Corp vs. Altus Property Ventures |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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