Correlation Between Sun Life and Scholastic
Can any of the company-specific risk be diversified away by investing in both Sun Life and Scholastic 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 Scholastic 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 Scholastic, you can compare the effects of market volatilities on Sun Life and Scholastic 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 Scholastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Scholastic.
Diversification Opportunities for Sun Life and Scholastic
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sun and Scholastic is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Scholastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scholastic 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 Scholastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scholastic has no effect on the direction of Sun Life i.e., Sun Life and Scholastic go up and down completely randomly.
Pair Corralation between Sun Life and Scholastic
Considering the 90-day investment horizon Sun Life Financial is expected to under-perform the Scholastic. But the stock apears to be less risky and, when comparing its historical volatility, Sun Life Financial is 1.61 times less risky than Scholastic. The stock trades about -0.17 of its potential returns per unit of risk. The Scholastic is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,017 in Scholastic on November 28, 2024 and sell it today you would earn a total of 83.00 from holding Scholastic or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Scholastic
Performance |
| Timeline |
| Sun Life Financial |
| Scholastic |
Sun Life and Scholastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Scholastic
The main advantage of trading using opposite Sun Life and Scholastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Scholastic 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 Scholastic will offset losses from the drop in Scholastic'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 |
| Scholastic vs. New York Times | Scholastic vs. John Wiley Sons | Scholastic vs. Gannett Co | Scholastic vs. Lee Enterprises Incorporated |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |