Correlation Between Sun Life and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Sun Life and Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings, you can compare the effects of market volatilities on Sun Life and Biglari Holdings 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 Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Biglari Holdings.
Diversification Opportunities for Sun Life and Biglari Holdings
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sun and Biglari is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings 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 Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Sun Life i.e., Sun Life and Biglari Holdings go up and down completely randomly.
Pair Corralation between Sun Life and Biglari Holdings
Considering the 90-day investment horizon Sun Life is expected to generate 1.95 times less return on investment than Biglari Holdings. But when comparing it to its historical volatility, Sun Life Financial is 2.93 times less risky than Biglari Holdings. It trades about 0.52 of its potential returns per unit of risk. Biglari Holdings is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 17,031 in Biglari Holdings on September 1, 2024 and sell it today you would earn a total of 4,012 from holding Biglari Holdings or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Biglari Holdings
Performance |
| Timeline |
| Sun Life Financial |
| Biglari Holdings |
Sun Life and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Biglari Holdings
The main advantage of trading using opposite Sun Life and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.| Sun Life vs. Hartford Financial Services | Sun Life vs. Goosehead Insurance | Sun Life vs. International General Insurance | Sun Life vs. Enstar Group Limited |
| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |