Correlation Between Sun Life and SILICON LABORATOR
Can any of the company-specific risk be diversified away by investing in both Sun Life and SILICON LABORATOR 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 SILICON LABORATOR 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 SILICON LABORATOR, you can compare the effects of market volatilities on Sun Life and SILICON LABORATOR 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 SILICON LABORATOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and SILICON LABORATOR.
Diversification Opportunities for Sun Life and SILICON LABORATOR
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sun and SILICON is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and SILICON LABORATOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILICON LABORATOR 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 SILICON LABORATOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILICON LABORATOR has no effect on the direction of Sun Life i.e., Sun Life and SILICON LABORATOR go up and down completely randomly.
Pair Corralation between Sun Life and SILICON LABORATOR
Assuming the 90 days horizon Sun Life is expected to generate 1.86 times less return on investment than SILICON LABORATOR. But when comparing it to its historical volatility, Sun Life Financial is 2.19 times less risky than SILICON LABORATOR. It trades about 0.13 of its potential returns per unit of risk. SILICON LABORATOR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10,400 in SILICON LABORATOR on October 14, 2024 and sell it today you would earn a total of 1,700 from holding SILICON LABORATOR or generate 16.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. SILICON LABORATOR
Performance |
| Timeline |
| Sun Life Financial |
| SILICON LABORATOR |
Sun Life and SILICON LABORATOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and SILICON LABORATOR
The main advantage of trading using opposite Sun Life and SILICON LABORATOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, SILICON LABORATOR 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 SILICON LABORATOR will offset losses from the drop in SILICON LABORATOR's long position.| Sun Life vs. Zurich Insurance Group | Sun Life vs. Superior Plus Corp | Sun Life vs. NMI Holdings | Sun Life vs. SIVERS SEMICONDUCTORS AB |
| SILICON LABORATOR vs. Synchrony Financial | SILICON LABORATOR vs. The Hanover Insurance | SILICON LABORATOR vs. COSMOSTEEL HLDGS | SILICON LABORATOR vs. Sun Life Financial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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