Correlation Between Sun Life and First CommunityPFD
Can any of the company-specific risk be diversified away by investing in both Sun Life and First CommunityPFD 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 First CommunityPFD 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 First Community, you can compare the effects of market volatilities on Sun Life and First CommunityPFD 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 First CommunityPFD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and First CommunityPFD.
Diversification Opportunities for Sun Life and First CommunityPFD
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sun and First is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First CommunityPFD 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 First CommunityPFD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First CommunityPFD has no effect on the direction of Sun Life i.e., Sun Life and First CommunityPFD go up and down completely randomly.
Pair Corralation between Sun Life and First CommunityPFD
Considering the 90-day investment horizon Sun Life Financial is expected to under-perform the First CommunityPFD. In addition to that, Sun Life is 1.24 times more volatile than First Community. It trades about -0.11 of its total potential returns per unit of risk. First Community is currently generating about 0.15 per unit of volatility. If you would invest 890.00 in First Community on October 26, 2024 and sell it today you would earn a total of 35.00 from holding First Community or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Sun Life Financial vs. First Community
Performance |
| Timeline |
| Sun Life Financial |
| First CommunityPFD |
Sun Life and First CommunityPFD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and First CommunityPFD
The main advantage of trading using opposite Sun Life and First CommunityPFD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, First CommunityPFD 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 First CommunityPFD will offset losses from the drop in First CommunityPFD'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 |
| First CommunityPFD vs. FG Annuities Life | First CommunityPFD vs. Sun Life Financial | First CommunityPFD vs. Aegon NV ADR | First CommunityPFD vs. National CineMedia |
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 CEOs Directory module to screen CEOs from public companies around the world.
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