Correlation Between Sun Life and Everspin Technologies
Can any of the company-specific risk be diversified away by investing in both Sun Life and Everspin Technologies 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 Everspin Technologies 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 Everspin Technologies, you can compare the effects of market volatilities on Sun Life and Everspin Technologies 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 Everspin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Everspin Technologies.
Diversification Opportunities for Sun Life and Everspin Technologies
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Everspin is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Everspin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everspin Technologies 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 Everspin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everspin Technologies has no effect on the direction of Sun Life i.e., Sun Life and Everspin Technologies go up and down completely randomly.
Pair Corralation between Sun Life and Everspin Technologies
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.37 times more return on investment than Everspin Technologies. However, Sun Life Financial is 2.71 times less risky than Everspin Technologies. It trades about 0.36 of its potential returns per unit of risk. Everspin Technologies is currently generating about -0.13 per unit of risk. If you would invest 5,600 in Sun Life Financial on August 31, 2024 and sell it today you would earn a total of 539.00 from holding Sun Life Financial or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Everspin Technologies
Performance |
| Timeline |
| Sun Life Financial |
| Everspin Technologies |
Sun Life and Everspin Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Everspin Technologies
The main advantage of trading using opposite Sun Life and Everspin Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Everspin Technologies 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 Everspin Technologies will offset losses from the drop in Everspin Technologies' long position.| Sun Life vs. American International Group | Sun Life vs. Hartford Financial Services | Sun Life vs. Goosehead Insurance | Sun Life vs. Enstar Group Limited |
| Everspin Technologies vs. MACOM Technology Solutions | Everspin Technologies vs. Power Integrations | Everspin Technologies vs. Diodes Incorporated | Everspin Technologies vs. CEVA Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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