Correlation Between Sun Life and Christian Dior
Can any of the company-specific risk be diversified away by investing in both Sun Life and Christian Dior 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 Christian Dior 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 Christian Dior SE, you can compare the effects of market volatilities on Sun Life and Christian Dior 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 Christian Dior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Christian Dior.
Diversification Opportunities for Sun Life and Christian Dior
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and Christian is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Christian Dior SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Christian Dior SE 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 Christian Dior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Christian Dior SE has no effect on the direction of Sun Life i.e., Sun Life and Christian Dior go up and down completely randomly.
Pair Corralation between Sun Life and Christian Dior
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.39 times more return on investment than Christian Dior. However, Sun Life Financial is 2.56 times less risky than Christian Dior. It trades about 0.32 of its potential returns per unit of risk. Christian Dior SE is currently generating about -0.2 per unit of risk. If you would invest 5,640 in Sun Life Financial on August 26, 2024 and sell it today you would earn a total of 478.00 from holding Sun Life Financial or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Christian Dior SE
Performance |
| Timeline |
| Sun Life Financial |
| Christian Dior SE |
Sun Life and Christian Dior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Christian Dior
The main advantage of trading using opposite Sun Life and Christian Dior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Christian Dior 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 Christian Dior will offset losses from the drop in Christian Dior'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 |
| Christian Dior vs. Kering SA | Christian Dior vs. Compagnie Financire Richemont | Christian Dior vs. Prada SpA | Christian Dior vs. Compagnie Financiere Richemont |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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