Correlation Between Sun Life and National Security
Can any of the company-specific risk be diversified away by investing in both Sun Life and National Security 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 National Security 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 National Security Group, you can compare the effects of market volatilities on Sun Life and National Security 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 National Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and National Security.
Diversification Opportunities for Sun Life and National Security
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and National Security Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Security 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 National Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Security has no effect on the direction of Sun Life i.e., Sun Life and National Security go up and down completely randomly.
Pair Corralation between Sun Life and National Security
If you would invest 4,309 in Sun Life Financial on January 19, 2024 and sell it today you would earn a total of 759.00 from holding Sun Life Financial or generate 17.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Sun Life Financial vs. National Security Group
Performance |
| Timeline |
| Sun Life Financial |
| National Security |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sun Life and National Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and National Security
The main advantage of trading using opposite Sun Life and National Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, National Security 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 National Security will offset losses from the drop in National Security's long position.The idea behind Sun Life Financial and National Security Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| National Security vs. Norfolk Southern | National Security vs. Procter Gamble | National Security vs. Academy Sports OutdoorsInc | National Security vs. Sun Life Financial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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