Correlation Between Verra Mobility and Sun Life
Can any of the company-specific risk be diversified away by investing in both Verra Mobility 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 Verra Mobility and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verra Mobility Corp and Sun Life Financial, you can compare the effects of market volatilities on Verra Mobility 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 Verra Mobility with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verra Mobility and Sun Life.
Diversification Opportunities for Verra Mobility and Sun Life
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Verra and Sun is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Verra Mobility 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 Verra Mobility 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 Verra Mobility 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 Verra Mobility i.e., Verra Mobility and Sun Life go up and down completely randomly.
Pair Corralation between Verra Mobility and Sun Life
Given the investment horizon of 90 days Verra Mobility Corp is expected to generate 1.58 times more return on investment than Sun Life. However, Verra Mobility is 1.58 times more volatile than Sun Life Financial. It trades about 0.06 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.08 per unit of risk. If you would invest 1,738 in Verra Mobility Corp on August 29, 2024 and sell it today you would earn a total of 623.00 from holding Verra Mobility Corp or generate 35.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verra Mobility Corp vs. Sun Life Financial
Performance |
| Timeline |
| Verra Mobility Corp |
| Sun Life Financial |
Verra Mobility and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verra Mobility and Sun Life
The main advantage of trading using opposite Verra Mobility and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verra Mobility 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.| Verra Mobility vs. International Money Express | Verra Mobility vs. Option Care Health | Verra Mobility vs. Aquagold International | Verra Mobility vs. Morningstar Unconstrained Allocation |
| Sun Life vs. Hartford Financial Services | Sun Life vs. Goosehead Insurance | Sun Life vs. International General Insurance | Sun Life vs. Enstar Group Limited |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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