Correlation Between Visteon Corp and Sun Life
Can any of the company-specific risk be diversified away by investing in both Visteon Corp 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 Visteon Corp and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visteon Corp and Sun Life Financial, you can compare the effects of market volatilities on Visteon Corp 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 Visteon Corp with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visteon Corp and Sun Life.
Diversification Opportunities for Visteon Corp and Sun Life
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visteon and Sun is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Visteon Corp 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 Visteon Corp 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 Visteon Corp 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 Visteon Corp i.e., Visteon Corp and Sun Life go up and down completely randomly.
Pair Corralation between Visteon Corp and Sun Life
Allowing for the 90-day total investment horizon Visteon Corp is expected to under-perform the Sun Life. In addition to that, Visteon Corp is 1.89 times more volatile than Sun Life Financial. It trades about -0.08 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.31 per unit of volatility. If you would invest 5,625 in Sun Life Financial on August 30, 2024 and sell it today you would earn a total of 467.00 from holding Sun Life Financial or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visteon Corp vs. Sun Life Financial
Performance |
| Timeline |
| Visteon Corp |
| Sun Life Financial |
Visteon Corp and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visteon Corp and Sun Life
The main advantage of trading using opposite Visteon Corp and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visteon Corp 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.| Visteon Corp vs. Gentex | Visteon Corp vs. Adient PLC | Visteon Corp vs. Autoliv | Visteon Corp vs. Fox Factory Holding |
| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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