Correlation Between Sun Life and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Sun Life and Oatly Group 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 Oatly Group 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 Oatly Group AB, you can compare the effects of market volatilities on Sun Life and Oatly Group 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 Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Oatly Group.
Diversification Opportunities for Sun Life and Oatly Group
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and Oatly is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Oatly Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oatly Group AB 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 Oatly Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oatly Group AB has no effect on the direction of Sun Life i.e., Sun Life and Oatly Group go up and down completely randomly.
Pair Corralation between Sun Life and Oatly Group
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.19 times more return on investment than Oatly Group. However, Sun Life Financial is 5.25 times less risky than Oatly Group. It trades about 0.34 of its potential returns per unit of risk. Oatly Group AB is currently generating about -0.05 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 492.00 from holding Sun Life Financial or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Oatly Group AB
Performance |
| Timeline |
| Sun Life Financial |
| Oatly Group AB |
Sun Life and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Oatly Group
The main advantage of trading using opposite Sun Life and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Oatly Group 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 Oatly Group will offset losses from the drop in Oatly Group's 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 |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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