Correlation Between Sun Life and TIMES CHINA
Can any of the company-specific risk be diversified away by investing in both Sun Life and TIMES CHINA 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 TIMES CHINA 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 TIMES CHINA HLDGS, you can compare the effects of market volatilities on Sun Life and TIMES CHINA 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 TIMES CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and TIMES CHINA.
Diversification Opportunities for Sun Life and TIMES CHINA
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and TIMES is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS 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 TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of Sun Life i.e., Sun Life and TIMES CHINA go up and down completely randomly.
Pair Corralation between Sun Life and TIMES CHINA
Assuming the 90 days horizon Sun Life Financial is expected to under-perform the TIMES CHINA. But the stock apears to be less risky and, when comparing its historical volatility, Sun Life Financial is 8.94 times less risky than TIMES CHINA. The stock trades about -0.24 of its potential returns per unit of risk. The TIMES CHINA HLDGS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.40 in TIMES CHINA HLDGS on October 9, 2024 and sell it today you would earn a total of 0.05 from holding TIMES CHINA HLDGS or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. TIMES CHINA HLDGS
Performance |
| Timeline |
| Sun Life Financial |
| TIMES CHINA HLDGS |
Sun Life and TIMES CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and TIMES CHINA
The main advantage of trading using opposite Sun Life and TIMES CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, TIMES CHINA 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 TIMES CHINA will offset losses from the drop in TIMES CHINA's long position.| Sun Life vs. Nissan Chemical Corp | Sun Life vs. Siamgas And Petrochemicals | Sun Life vs. Apollo Investment Corp | Sun Life vs. AIR PRODCHEMICALS |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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