Correlation Between Globe Telecom and Sun Life
Can any of the company-specific risk be diversified away by investing in both Globe Telecom 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 Globe Telecom and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Telecom and Sun Life Financial, you can compare the effects of market volatilities on Globe Telecom 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 Globe Telecom with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Telecom and Sun Life.
Diversification Opportunities for Globe Telecom and Sun Life
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globe and Sun is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Globe Telecom 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 Globe Telecom 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 Globe Telecom 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 Globe Telecom i.e., Globe Telecom and Sun Life go up and down completely randomly.
Pair Corralation between Globe Telecom and Sun Life
Assuming the 90 days trading horizon Globe Telecom is expected to under-perform the Sun Life. But the stock apears to be less risky and, when comparing its historical volatility, Globe Telecom is 2.07 times less risky than Sun Life. The stock trades about -0.02 of its potential returns per unit of risk. The Sun Life Financial is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 292,029 in Sun Life Financial on September 12, 2024 and sell it today you would earn a total of 65,971 from holding Sun Life Financial or generate 22.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 82.54% |
| Values | Daily Returns |
Globe Telecom vs. Sun Life Financial
Performance |
| Timeline |
| Globe Telecom |
| Sun Life Financial |
Globe Telecom and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Telecom and Sun Life
The main advantage of trading using opposite Globe Telecom and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Telecom 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.| Globe Telecom vs. GT Capital Holdings | Globe Telecom vs. Allhome Corp | Globe Telecom vs. Jollibee Foods Corp | Globe Telecom vs. LFM Properties Corp |
| Sun Life vs. Manulife Financial Corp | Sun Life vs. National Reinsurance | 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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