Correlation Between Sun Life and Vista Outdoor
Can any of the company-specific risk be diversified away by investing in both Sun Life and Vista Outdoor 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 Vista Outdoor 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 Vista Outdoor, you can compare the effects of market volatilities on Sun Life and Vista Outdoor 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 Vista Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Vista Outdoor.
Diversification Opportunities for Sun Life and Vista Outdoor
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sun and Vista is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Vista Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Outdoor 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 Vista Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Outdoor has no effect on the direction of Sun Life i.e., Sun Life and Vista Outdoor go up and down completely randomly.
Pair Corralation between Sun Life and Vista Outdoor
If you would invest 4,463 in Vista Outdoor on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Vista Outdoor or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 2.44% |
| Values | Daily Returns |
Sun Life Financial vs. Vista Outdoor
Performance |
| Timeline |
| Sun Life Financial |
| Vista Outdoor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
Sun Life and Vista Outdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Vista Outdoor
The main advantage of trading using opposite Sun Life and Vista Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Vista Outdoor 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 Vista Outdoor will offset losses from the drop in Vista Outdoor's long position.| Sun Life vs. Alphatec Holdings | Sun Life vs. enVVeno Medical Corp | Sun Life vs. Western Digital | Sun Life vs. LENSAR Inc |
| Vista Outdoor vs. Clarus Corp | Vista Outdoor vs. Johnson Outdoors | Vista Outdoor vs. Escalade Incorporated | Vista Outdoor vs. JAKKS Pacific |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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