Correlation Between Sun Life and KVH Industries
Can any of the company-specific risk be diversified away by investing in both Sun Life and KVH Industries 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 KVH Industries 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 KVH Industries, you can compare the effects of market volatilities on Sun Life and KVH Industries 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 KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and KVH Industries.
Diversification Opportunities for Sun Life and KVH Industries
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sun and KVH is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries 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 KVH Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KVH Industries has no effect on the direction of Sun Life i.e., Sun Life and KVH Industries go up and down completely randomly.
Pair Corralation between Sun Life and KVH Industries
Considering the 90-day investment horizon Sun Life is expected to generate 1.0 times less return on investment than KVH Industries. But when comparing it to its historical volatility, Sun Life Financial is 2.35 times less risky than KVH Industries. It trades about 0.09 of its potential returns per unit of risk. KVH Industries is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 501.00 in KVH Industries on September 4, 2024 and sell it today you would earn a total of 83.00 from holding KVH Industries or generate 16.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. KVH Industries
Performance |
| Timeline |
| Sun Life Financial |
| KVH Industries |
Sun Life and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and KVH Industries
The main advantage of trading using opposite Sun Life and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, KVH Industries 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 KVH Industries will offset losses from the drop in KVH Industries' 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 |
| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |