Correlation Between First Abacus and Sun Life
Can any of the company-specific risk be diversified away by investing in both First Abacus 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 First Abacus and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Abacus Financial and Sun Life Financial, you can compare the effects of market volatilities on First Abacus 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 First Abacus with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Abacus and Sun Life.
Diversification Opportunities for First Abacus and Sun Life
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Sun is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding First Abacus Financial 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 First Abacus 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 First Abacus Financial 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 First Abacus i.e., First Abacus and Sun Life go up and down completely randomly.
Pair Corralation between First Abacus and Sun Life
Assuming the 90 days trading horizon First Abacus Financial is expected to generate 1.75 times more return on investment than Sun Life. However, First Abacus is 1.75 times more volatile than Sun Life Financial. It trades about 0.06 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.1 per unit of risk. If you would invest 59.00 in First Abacus Financial on September 21, 2024 and sell it today you would earn a total of 3.00 from holding First Abacus Financial or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.76% |
| Values | Daily Returns |
First Abacus Financial vs. Sun Life Financial
Performance |
| Timeline |
| First Abacus Financial |
| Sun Life Financial |
First Abacus and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Abacus and Sun Life
The main advantage of trading using opposite First Abacus and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Abacus 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.| First Abacus vs. Jollibee Foods Corp | First Abacus vs. STI Education Systems | First Abacus vs. SM Investments Corp | First Abacus vs. Asia United Bank |
| Sun Life vs. National Reinsurance | Sun Life vs. First Abacus Financial | Sun Life vs. GT Capital Holdings | Sun Life vs. Allhome Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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