Correlation Between Sun Life and Safe Pro
Can any of the company-specific risk be diversified away by investing in both Sun Life and Safe Pro 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 Safe Pro 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 Safe Pro Group, you can compare the effects of market volatilities on Sun Life and Safe Pro 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 Safe Pro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Safe Pro.
Diversification Opportunities for Sun Life and Safe Pro
Very good diversification
The 3 months correlation between Sun and Safe is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Safe Pro Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Pro Group 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 Safe Pro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Pro Group has no effect on the direction of Sun Life i.e., Sun Life and Safe Pro go up and down completely randomly.
Pair Corralation between Sun Life and Safe Pro
Considering the 90-day investment horizon Sun Life is expected to generate 11.51 times less return on investment than Safe Pro. But when comparing it to its historical volatility, Sun Life Financial is 11.96 times less risky than Safe Pro. It trades about 0.32 of its potential returns per unit of risk. Safe Pro Group is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 221.00 in Safe Pro Group on August 28, 2024 and sell it today you would earn a total of 238.00 from holding Safe Pro Group or generate 107.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Safe Pro Group
Performance |
| Timeline |
| Sun Life Financial |
| Safe Pro Group |
Sun Life and Safe Pro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Safe Pro
The main advantage of trading using opposite Sun Life and Safe Pro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Safe Pro 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 Safe Pro will offset losses from the drop in Safe Pro'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 |
| Safe Pro vs. The Hanover Insurance | Safe Pro vs. Hawkins | Safe Pro vs. Sun Life Financial | Safe Pro vs. Ecovyst |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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