Correlation Between GT Capital and Sun Life
Can any of the company-specific risk be diversified away by investing in both GT Capital 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 GT Capital and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GT Capital Holdings and Sun Life Financial, you can compare the effects of market volatilities on GT Capital 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 GT Capital with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Capital and Sun Life.
Diversification Opportunities for GT Capital and Sun Life
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GTCAP and Sun is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings 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 GT Capital 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 GT Capital Holdings 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 GT Capital i.e., GT Capital and Sun Life go up and down completely randomly.
Pair Corralation between GT Capital and Sun Life
Assuming the 90 days trading horizon GT Capital is expected to generate 11.24 times less return on investment than Sun Life. But when comparing it to its historical volatility, GT Capital Holdings is 1.95 times less risky than Sun Life. It trades about 0.02 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 287,079 in Sun Life Financial on September 2, 2024 and sell it today you would earn a total of 72,921 from holding Sun Life Financial or generate 25.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.69% |
| Values | Daily Returns |
GT Capital Holdings vs. Sun Life Financial
Performance |
| Timeline |
| GT Capital Holdings |
| Sun Life Financial |
GT Capital and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GT Capital and Sun Life
The main advantage of trading using opposite GT Capital and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Capital 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.| GT Capital vs. Philex Mining Corp | GT Capital vs. Metropolitan Bank Trust | GT Capital vs. Apex Mining Co | GT Capital vs. STI Education Systems |
| Sun Life vs. GT Capital Holdings | Sun Life vs. Allhome Corp | Sun Life vs. Jollibee Foods Corp | Sun Life vs. LFM Properties 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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