Correlation Between Sun Life and China Aircraft
Can any of the company-specific risk be diversified away by investing in both Sun Life and China Aircraft 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 China Aircraft 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 China Aircraft Leasing, you can compare the effects of market volatilities on Sun Life and China Aircraft 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 China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and China Aircraft.
Diversification Opportunities for Sun Life and China Aircraft
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sun and China is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing 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 China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of Sun Life i.e., Sun Life and China Aircraft go up and down completely randomly.
Pair Corralation between Sun Life and China Aircraft
If you would invest 5,514 in Sun Life Financial on September 3, 2024 and sell it today you would earn a total of 625.00 from holding Sun Life Financial or generate 11.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. China Aircraft Leasing
Performance |
| Timeline |
| Sun Life Financial |
| China Aircraft Leasing |
Sun Life and China Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and China Aircraft
The main advantage of trading using opposite Sun Life and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, China Aircraft 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 China Aircraft will offset losses from the drop in China Aircraft'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 |
| China Aircraft vs. United Rentals | China Aircraft vs. Ashtead Gro | China Aircraft vs. Ashtead Group plc | China Aircraft vs. AerCap Holdings 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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