Correlation Between Tyson Foods and Sun Life
Can any of the company-specific risk be diversified away by investing in both Tyson Foods and Sun Life 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 Tyson Foods and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Sun Life Financial, you can compare the effects of market volatilities on Tyson Foods and Sun Life 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 Tyson Foods with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Sun Life.
Diversification Opportunities for Tyson Foods and Sun Life
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tyson and Sun is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial and Tyson Foods 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 Tyson Foods are associated (or correlated) with Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Tyson Foods i.e., Tyson Foods and Sun Life go up and down completely randomly.
Pair Corralation between Tyson Foods and Sun Life
Assuming the 90 days trading horizon Tyson Foods is expected to under-perform the Sun Life. In addition to that, Tyson Foods is 1.48 times more volatile than Sun Life Financial. It trades about -0.12 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.01 per unit of volatility. If you would invest 5,700 in Sun Life Financial on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Sun Life Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Sun Life Financial
Performance |
| Timeline |
| Tyson Foods |
| Sun Life Financial |
Tyson Foods and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Sun Life
The main advantage of trading using opposite Tyson Foods and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Tyson Foods vs. BANKINTER ADR 2007 | Tyson Foods vs. Insurance Australia Group | Tyson Foods vs. Commonwealth Bank of | Tyson Foods vs. BANK OF CHINA |
| Sun Life vs. Cardinal Health | Sun Life vs. OPKO HEALTH | Sun Life vs. US Physical Therapy | Sun Life vs. Wenzhou Kangning Hospital |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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