Correlation Between Sun Life and Ahren Acquisition
Can any of the company-specific risk be diversified away by investing in both Sun Life and Ahren Acquisition 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 Ahren Acquisition 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 Ahren Acquisition Corp, you can compare the effects of market volatilities on Sun Life and Ahren Acquisition 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 Ahren Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Ahren Acquisition.
Diversification Opportunities for Sun Life and Ahren Acquisition
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sun and Ahren is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Ahren Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ahren Acquisition 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 Ahren Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ahren Acquisition Corp has no effect on the direction of Sun Life i.e., Sun Life and Ahren Acquisition go up and down completely randomly.
Pair Corralation between Sun Life and Ahren Acquisition
Considering the 90-day investment horizon Sun Life Financial is expected to generate 12.45 times more return on investment than Ahren Acquisition. However, Sun Life is 12.45 times more volatile than Ahren Acquisition Corp. It trades about 0.07 of its potential returns per unit of risk. Ahren Acquisition Corp is currently generating about 0.26 per unit of risk. If you would invest 4,243 in Sun Life Financial on August 30, 2024 and sell it today you would earn a total of 1,849 from holding Sun Life Financial or generate 43.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 26.46% |
| Values | Daily Returns |
Sun Life Financial vs. Ahren Acquisition Corp
Performance |
| Timeline |
| Sun Life Financial |
| Ahren Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sun Life and Ahren Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Ahren Acquisition
The main advantage of trading using opposite Sun Life and Ahren Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Ahren Acquisition 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 Ahren Acquisition will offset losses from the drop in Ahren Acquisition's long position.| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
| Ahren Acquisition vs. Manaris Corp | Ahren Acquisition vs. Alpha Star Acquisition | Ahren Acquisition vs. Alpha One | Ahren Acquisition vs. Athena Technology Acquisition |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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