Correlation Between Sun Life and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both Sun Life and Grocery Outlet 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 Grocery Outlet 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 Grocery Outlet Holding, you can compare the effects of market volatilities on Sun Life and Grocery Outlet 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 Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Grocery Outlet.
Diversification Opportunities for Sun Life and Grocery Outlet
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Grocery is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Grocery Outlet Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grocery Outlet Holding 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 Grocery Outlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grocery Outlet Holding has no effect on the direction of Sun Life i.e., Sun Life and Grocery Outlet go up and down completely randomly.
Pair Corralation between Sun Life and Grocery Outlet
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.35 times more return on investment than Grocery Outlet. However, Sun Life Financial is 2.84 times less risky than Grocery Outlet. It trades about 0.09 of its potential returns per unit of risk. Grocery Outlet Holding is currently generating about -0.04 per unit of risk. If you would invest 4,962 in Sun Life Financial on September 4, 2024 and sell it today you would earn a total of 1,208 from holding Sun Life Financial or generate 24.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sun Life Financial vs. Grocery Outlet Holding
Performance |
| Timeline |
| Sun Life Financial |
| Grocery Outlet Holding |
Sun Life and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Grocery Outlet
The main advantage of trading using opposite Sun Life and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Grocery Outlet 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 Grocery Outlet will offset losses from the drop in Grocery Outlet'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 |
| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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