Correlation Between Sun Life and Selina Hospitality
Can any of the company-specific risk be diversified away by investing in both Sun Life and Selina Hospitality 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 Selina Hospitality 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 Selina Hospitality PLC, you can compare the effects of market volatilities on Sun Life and Selina Hospitality 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 Selina Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Selina Hospitality.
Diversification Opportunities for Sun Life and Selina Hospitality
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sun and Selina is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Selina Hospitality PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selina Hospitality PLC 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 Selina Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selina Hospitality PLC has no effect on the direction of Sun Life i.e., Sun Life and Selina Hospitality go up and down completely randomly.
Pair Corralation between Sun Life and Selina Hospitality
Considering the 90-day investment horizon Sun Life is expected to generate 118.5 times less return on investment than Selina Hospitality. But when comparing it to its historical volatility, Sun Life Financial is 64.36 times less risky than Selina Hospitality. It trades about 0.07 of its potential returns per unit of risk. Selina Hospitality PLC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.27 in Selina Hospitality PLC on September 14, 2024 and sell it today you would lose (0.27) from holding Selina Hospitality PLC or give up 21.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.21% |
| Values | Daily Returns |
Sun Life Financial vs. Selina Hospitality PLC
Performance |
| Timeline |
| Sun Life Financial |
| Selina Hospitality PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sun Life and Selina Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Selina Hospitality
The main advantage of trading using opposite Sun Life and Selina Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Selina Hospitality 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 Selina Hospitality will offset losses from the drop in Selina Hospitality'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 |
| Selina Hospitality vs. Cardinal Health | Selina Hospitality vs. Sun Life Financial | Selina Hospitality vs. Akanda Corp | Selina Hospitality vs. United Airlines Holdings |
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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