Correlation Between Sun Life and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Sun Life and Zurich Insurance 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 Zurich Insurance 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 Zurich Insurance Group, you can compare the effects of market volatilities on Sun Life and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Zurich Insurance.
Diversification Opportunities for Sun Life and Zurich Insurance
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Zurich is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of Sun Life i.e., Sun Life and Zurich Insurance go up and down completely randomly.
Pair Corralation between Sun Life and Zurich Insurance
Considering the 90-day investment horizon Sun Life Financial is expected to generate 1.03 times more return on investment than Zurich Insurance. However, Sun Life is 1.03 times more volatile than Zurich Insurance Group. It trades about 0.23 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.17 per unit of risk. If you would invest 5,428 in Sun Life Financial on September 2, 2024 and sell it today you would earn a total of 711.00 from holding Sun Life Financial or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Zurich Insurance Group
Performance |
| Timeline |
| Sun Life Financial |
| Zurich Insurance |
Sun Life and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Zurich Insurance
The main advantage of trading using opposite Sun Life and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance'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 |
| Zurich Insurance vs. ageas SANV | Zurich Insurance vs. Athene Holding | Zurich Insurance vs. Sampo OYJ | Zurich Insurance vs. Athene Holding |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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