Correlation Between Sun Life and Regen BioPharma
Can any of the company-specific risk be diversified away by investing in both Sun Life and Regen BioPharma 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 Regen BioPharma 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 Regen BioPharma, you can compare the effects of market volatilities on Sun Life and Regen BioPharma 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 Regen BioPharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Regen BioPharma.
Diversification Opportunities for Sun Life and Regen BioPharma
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and Regen is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Regen BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regen BioPharma 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 Regen BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regen BioPharma has no effect on the direction of Sun Life i.e., Sun Life and Regen BioPharma go up and down completely randomly.
Pair Corralation between Sun Life and Regen BioPharma
Considering the 90-day investment horizon Sun Life is expected to generate 32.5 times less return on investment than Regen BioPharma. But when comparing it to its historical volatility, Sun Life Financial is 43.08 times less risky than Regen BioPharma. It trades about 0.14 of its potential returns per unit of risk. Regen BioPharma is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Regen BioPharma on September 13, 2024 and sell it today you would lose (3.95) from holding Regen BioPharma or give up 39.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sun Life Financial vs. Regen BioPharma
Performance |
| Timeline |
| Sun Life Financial |
| Regen BioPharma |
Sun Life and Regen BioPharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Regen BioPharma
The main advantage of trading using opposite Sun Life and Regen BioPharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Regen BioPharma 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 Regen BioPharma will offset losses from the drop in Regen BioPharma'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 |
| Regen BioPharma vs. Sino Biopharmaceutical Ltd | Regen BioPharma vs. Defence Therapeutics | Regen BioPharma vs. Aileron Therapeutics | Regen BioPharma vs. Enlivex Therapeutics |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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