Correlation Between Sun Life and Marimed
Can any of the company-specific risk be diversified away by investing in both Sun Life and Marimed 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 Marimed 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 Marimed, you can compare the effects of market volatilities on Sun Life and Marimed 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 Marimed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Marimed.
Diversification Opportunities for Sun Life and Marimed
Good diversification
The 3 months correlation between Sun and Marimed is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Marimed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marimed 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 Marimed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marimed has no effect on the direction of Sun Life i.e., Sun Life and Marimed go up and down completely randomly.
Pair Corralation between Sun Life and Marimed
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.16 times more return on investment than Marimed. However, Sun Life Financial is 6.38 times less risky than Marimed. It trades about -0.1 of its potential returns per unit of risk. Marimed is currently generating about -0.05 per unit of risk. If you would invest 5,893 in Sun Life Financial on November 3, 2024 and sell it today you would lose (115.00) from holding Sun Life Financial or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Marimed
Performance |
| Timeline |
| Sun Life Financial |
| Marimed |
Sun Life and Marimed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Marimed
The main advantage of trading using opposite Sun Life and Marimed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Marimed 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 Marimed will offset losses from the drop in Marimed'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 |
| Marimed vs. Verano Holdings Corp | Marimed vs. Cresco Labs | Marimed vs. AYR Strategies Class | Marimed vs. Green Thumb Industries |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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