Correlation Between Sun Life and Air Products
Can any of the company-specific risk be diversified away by investing in both Sun Life and Air Products 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 Air Products 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 Air Products and, you can compare the effects of market volatilities on Sun Life and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Air Products.
Diversification Opportunities for Sun Life and Air Products
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sun and Air is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Sun Life i.e., Sun Life and Air Products go up and down completely randomly.
Pair Corralation between Sun Life and Air Products
Considering the 90-day investment horizon Sun Life Financial is expected to generate 1.16 times more return on investment than Air Products. However, Sun Life is 1.16 times more volatile than Air Products and. It trades about 0.32 of its potential returns per unit of risk. Air Products and is currently generating about 0.23 per unit of risk. If you would invest 5,696 in Sun Life Financial on August 28, 2024 and sell it today you would earn a total of 462.00 from holding Sun Life Financial or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Air Products and
Performance |
| Timeline |
| Sun Life Financial |
| Air Products |
Sun Life and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Air Products
The main advantage of trading using opposite Sun Life and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' 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 |
| Air Products vs. PPG Industries | Air Products vs. Ecolab Inc | Air Products vs. Sherwin Williams Co | Air Products vs. LyondellBasell Industries NV |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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