Correlation Between Sun Life and NantKwest

Can any of the company-specific risk be diversified away by investing in both Sun Life and NantKwest 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 NantKwest 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 NantKwest, you can compare the effects of market volatilities on Sun Life and NantKwest 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 NantKwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and NantKwest.

Diversification Opportunities for Sun Life and NantKwest

0.0

Correlation Coefficient

Sun Life  NantKwest

Pay attention - limited upside

The 3 months correlation between Sun and NantKwest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and NantKwest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NantKwest 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 NantKwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NantKwest has no effect on the direction of Sun Life i.e., Sun Life and NantKwest go up and down completely randomly.

Pair Corralation between Sun Life and NantKwest

If you would invest (100.00) in NantKwest on February 5, 2024 and sell it today you would earn a total of  100.00  from holding NantKwest or generate -100.0% 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.  NantKwest

Sun Life Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Sun Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

NantKwest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NantKwest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, NantKwest is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sun Life and NantKwest

The main advantage of trading using opposite Sun Life and NantKwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, NantKwest 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 NantKwest will offset losses from the drop in NantKwest's long position.

The idea behind Sun Life Financial and NantKwest 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.