Correlation Between Sun Life and Talanx AG

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

Diversification Opportunities for Sun Life and Talanx AG

0.82

Correlation Coefficient

Sun Life  Talanx AG

Very poor diversification

The 3 months correlation between Sun and Talanx is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG 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 Talanx AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talanx AG has no effect on the direction of Sun Life i.e., Sun Life and Talanx AG go up and down completely randomly.

Pair Corralation between Sun Life and Talanx AG

Assuming the 90 days horizon Sun Life is expected to generate 3.41 times less return on investment than Talanx AG. But when comparing it to its historical volatility, Sun Life Financial is 1.27 times less risky than Talanx AG. It trades about 0.04 of its potential returns per unit of risk. Talanx AG is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5,288  in Talanx AG on April 24, 2025 and sell it today you would earn a total of  5,602  from holding Talanx AG or generate 105.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Sun Life Financial  vs.  Talanx AG

Sun Life Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Sun Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Talanx AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Talanx AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Talanx AG may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Sun Life and Talanx AG

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

The idea behind Sun Life Financial and Talanx AG 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.