Correlation Between Sun Life and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both Sun Life and Virtus Investment 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 Virtus Investment 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 Virtus Investment Partners,, you can compare the effects of market volatilities on Sun Life and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Virtus Investment.
Diversification Opportunities for Sun Life and Virtus Investment
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sun and Virtus is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Virtus Investment Partners, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Sun Life i.e., Sun Life and Virtus Investment go up and down completely randomly.
Pair Corralation between Sun Life and Virtus Investment
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.6 times more return on investment than Virtus Investment. However, Sun Life Financial is 1.67 times less risky than Virtus Investment. It trades about -0.11 of its potential returns per unit of risk. Virtus Investment Partners, is currently generating about -0.29 per unit of risk. If you would invest 6,092 in Sun Life Financial on October 28, 2024 and sell it today you would lose (234.00) from holding Sun Life Financial or give up 3.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Virtus Investment Partners,
Performance |
| Timeline |
| Sun Life Financial |
| Virtus Investment |
Sun Life and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Virtus Investment
The main advantage of trading using opposite Sun Life and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment'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 |
| Virtus Investment vs. Invesco Advantage MIT | Virtus Investment vs. Invesco Municipal Trust | Virtus Investment vs. Invesco California Value | Virtus Investment vs. Tri Continental Closed |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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