Correlation Between ITALIAN WINE and Sun Life

Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE 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 ITALIAN WINE and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ITALIAN WINE BRANDS and Sun Life Financial, you can compare the effects of market volatilities on ITALIAN WINE 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 ITALIAN WINE with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and Sun Life.

Diversification Opportunities for ITALIAN WINE and Sun Life

0.65

Correlation Coefficient

ITALIAN WINE  Sun Life

Poor diversification

The 3 months correlation between ITALIAN and Sun is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS 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 ITALIAN WINE 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 ITALIAN WINE BRANDS 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 ITALIAN WINE i.e., ITALIAN WINE and Sun Life go up and down completely randomly.

Pair Corralation between ITALIAN WINE and Sun Life

Assuming the 90 days horizon ITALIAN WINE is expected to generate 5.04 times less return on investment than Sun Life. In addition to that, ITALIAN WINE is 1.01 times more volatile than Sun Life Financial. It trades about 0.02 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.12 per unit of volatility. If you would invest  4,910  in Sun Life Financial on April 20, 2025 and sell it today you would earn a total of  390.00  from holding Sun Life Financial or generate 7.94% return on investment over 90 days.

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

ITALIAN WINE BRANDS  vs.  Sun Life Financial

ITALIAN WINE BRANDS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ITALIAN WINE BRANDS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ITALIAN WINE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sun Life may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with ITALIAN WINE and Sun Life

The main advantage of trading using opposite ITALIAN WINE and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE 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.

The idea behind ITALIAN WINE BRANDS and Sun Life Financial 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.