Correlation Between Sun Life and First Hydrogen
Can any of the company-specific risk be diversified away by investing in both Sun Life and First Hydrogen 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 Hydrogen 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 Hydrogen Corp, you can compare the effects of market volatilities on Sun Life and First Hydrogen 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 Hydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and First Hydrogen.
Diversification Opportunities for Sun Life and First Hydrogen
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and First is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and First Hydrogen Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hydrogen Corp 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 Hydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hydrogen Corp has no effect on the direction of Sun Life i.e., Sun Life and First Hydrogen go up and down completely randomly.
Pair Corralation between Sun Life and First Hydrogen
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.16 times more return on investment than First Hydrogen. However, Sun Life Financial is 6.23 times less risky than First Hydrogen. It trades about 0.19 of its potential returns per unit of risk. First Hydrogen Corp is currently generating about -0.1 per unit of risk. If you would invest 4,855 in Sun Life Financial on September 2, 2024 and sell it today you would earn a total of 1,284 from holding Sun Life Financial or generate 26.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sun Life Financial vs. First Hydrogen Corp
Performance |
| Timeline |
| Sun Life Financial |
| First Hydrogen Corp |
Sun Life and First Hydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and First Hydrogen
The main advantage of trading using opposite Sun Life and First Hydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, First Hydrogen 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 Hydrogen will offset losses from the drop in First Hydrogen'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 Hydrogen vs. BAIC Motor | First Hydrogen vs. Zapp Electric Vehicles | First Hydrogen vs. Guangzhou Automobile Group | First Hydrogen vs. Phoenix Motor Common |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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