Correlation Between Sun Life and Verra Mobility
Can any of the company-specific risk be diversified away by investing in both Sun Life and Verra Mobility 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 Verra Mobility 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 Verra Mobility Corp, you can compare the effects of market volatilities on Sun Life and Verra Mobility 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 Verra Mobility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Verra Mobility.
Diversification Opportunities for Sun Life and Verra Mobility
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and Verra is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Verra Mobility Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verra Mobility Corp 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 Verra Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verra Mobility Corp has no effect on the direction of Sun Life i.e., Sun Life and Verra Mobility go up and down completely randomly.
Pair Corralation between Sun Life and Verra Mobility
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.41 times more return on investment than Verra Mobility. However, Sun Life Financial is 2.43 times less risky than Verra Mobility. It trades about 0.31 of its potential returns per unit of risk. Verra Mobility Corp is currently generating about -0.16 per unit of risk. If you would invest 5,696 in Sun Life Financial on August 29, 2024 and sell it today you would earn a total of 455.00 from holding Sun Life Financial or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Verra Mobility Corp
Performance |
| Timeline |
| Sun Life Financial |
| Verra Mobility Corp |
Sun Life and Verra Mobility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Verra Mobility
The main advantage of trading using opposite Sun Life and Verra Mobility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Verra Mobility 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 Verra Mobility will offset losses from the drop in Verra Mobility's long position.| Sun Life vs. Hartford Financial Services | Sun Life vs. Goosehead Insurance | Sun Life vs. International General Insurance | Sun Life vs. Enstar Group Limited |
| Verra Mobility vs. International Money Express | Verra Mobility vs. Option Care Health | Verra Mobility vs. Aquagold International | Verra Mobility vs. Morningstar Unconstrained Allocation |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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