Correlation Between Sun Life and US Silica
Can any of the company-specific risk be diversified away by investing in both Sun Life and US Silica 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 US Silica 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 US Silica Holdings, you can compare the effects of market volatilities on Sun Life and US Silica 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 US Silica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and US Silica.
Diversification Opportunities for Sun Life and US Silica
Pay attention - limited upside
The 3 months correlation between Sun and SLCA is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and US Silica Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Silica Holdings 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 US Silica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Silica Holdings has no effect on the direction of Sun Life i.e., Sun Life and US Silica go up and down completely randomly.
Pair Corralation between Sun Life and US Silica
If you would invest 5,892 in Sun Life Financial on October 21, 2024 and sell it today you would lose (1.00) from holding Sun Life Financial or give up 0.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Sun Life Financial vs. US Silica Holdings
Performance |
| Timeline |
| Sun Life Financial |
| US Silica Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sun Life and US Silica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and US Silica
The main advantage of trading using opposite Sun Life and US Silica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, US Silica 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 US Silica will offset losses from the drop in US Silica'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 |
| US Silica vs. North American Construction | US Silica vs. ProPetro Holding Corp | US Silica vs. Ranger Energy Services | US Silica vs. Cactus Inc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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