Correlation Between Sun Life and Andlauer Healthcare

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

Diversification Opportunities for Sun Life and Andlauer Healthcare

0.48

Correlation Coefficient

Sun Life  Andlauer Healthcare

Very weak diversification

The 3 months correlation between Sun and Andlauer is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Andlauer Healthcare Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andlauer Healthcare 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 Andlauer Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andlauer Healthcare has no effect on the direction of Sun Life i.e., Sun Life and Andlauer Healthcare go up and down completely randomly.

Pair Corralation between Sun Life and Andlauer Healthcare

Assuming the 90 days trading horizon Sun Life Financial is expected to generate 1.42 times more return on investment than Andlauer Healthcare. However, Sun Life is 1.42 times more volatile than Andlauer Healthcare Gr. It trades about 0.31 of its potential returns per unit of risk. Andlauer Healthcare Gr is currently generating about -0.03 per unit of risk. If you would invest  2,001  in Sun Life Financial on May 26, 2025 and sell it today you would earn a total of  209.00  from holding Sun Life Financial or generate 10.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Sun Life Financial  vs.  Andlauer Healthcare Gr

Sun Life Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Sun Life may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Andlauer Healthcare

Risk-Adjusted Performance

Weakest

Over the last 90 days Andlauer Healthcare Gr has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Andlauer Healthcare is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sun Life and Andlauer Healthcare

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

The idea behind Sun Life Financial and Andlauer Healthcare Gr 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.