Correlation Between Walmart and Sun Life
Can any of the company-specific risk be diversified away by investing in both Walmart 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 Walmart and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart Inc CDR and Sun Life Financial, you can compare the effects of market volatilities on Walmart 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 Walmart with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Sun Life.
Diversification Opportunities for Walmart and Sun Life
Modest diversification
The 3 months correlation between Walmart and Sun is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR 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 Walmart 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 Walmart Inc CDR 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 Walmart i.e., Walmart and Sun Life go up and down completely randomly.
Pair Corralation between Walmart and Sun Life
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 1.31 times more return on investment than Sun Life. However, Walmart is 1.31 times more volatile than Sun Life Financial. It trades about 0.17 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.0 per unit of risk. If you would invest 2,870 in Walmart Inc CDR on November 28, 2024 and sell it today you would earn a total of 1,361 from holding Walmart Inc CDR or generate 47.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. Sun Life Financial
Performance |
| Timeline |
| Walmart Inc CDR |
| Sun Life Financial |
Walmart and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Sun Life
The main advantage of trading using opposite Walmart and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart 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.| Walmart vs. Brookfield Office Properties | Walmart vs. Stampede Drilling | Walmart vs. Pembina Pipeline Corp | Walmart vs. Precision Drilling |
| Sun Life vs. Toronto Dominion Bank Pref | Sun Life vs. Primaris Retail RE | Sun Life vs. SalesforceCom CDR | Sun Life vs. Plaza Retail REIT |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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