Correlation Between Sun Life and ScanSource
Can any of the company-specific risk be diversified away by investing in both Sun Life and ScanSource 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 ScanSource 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 ScanSource, you can compare the effects of market volatilities on Sun Life and ScanSource 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 ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and ScanSource.
Diversification Opportunities for Sun Life and ScanSource
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and ScanSource is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Sun Life i.e., Sun Life and ScanSource go up and down completely randomly.
Pair Corralation between Sun Life and ScanSource
Considering the 90-day investment horizon Sun Life is expected to generate 1.06 times less return on investment than ScanSource. But when comparing it to its historical volatility, Sun Life Financial is 2.84 times less risky than ScanSource. It trades about 0.15 of its potential returns per unit of risk. ScanSource is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,803 in ScanSource on August 31, 2024 and sell it today you would earn a total of 246.00 from holding ScanSource or generate 5.12% 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. ScanSource
Performance |
| Timeline |
| Sun Life Financial |
| ScanSource |
Sun Life and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and ScanSource
The main advantage of trading using opposite Sun Life and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource'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 |
| ScanSource vs. Climb Global Solutions | ScanSource vs. Insight Enterprises | ScanSource vs. Synnex | ScanSource vs. PC Connection |
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 Stocks Directory module to find actively traded stocks across global markets.
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