Correlation Between Microsoft and SUN LIFE
Can any of the company-specific risk be diversified away by investing in both Microsoft 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 Microsoft and SUN LIFE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and SUN LIFE FINANCIAL, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of SUN LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and SUN LIFE.
Diversification Opportunities for Microsoft and SUN LIFE
Pay attention - limited upside
The 3 months correlation between Microsoft and SUN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft 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 Microsoft 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 Microsoft 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 Microsoft i.e., Microsoft and SUN LIFE go up and down completely randomly.
Pair Corralation between Microsoft and SUN LIFE
If you would invest 25,277 in Microsoft on September 3, 2024 and sell it today you would earn a total of 17,821 from holding Microsoft or generate 70.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Microsoft vs. SUN LIFE FINANCIAL
Performance |
| Timeline |
| Microsoft |
| SUN LIFE FINANCIAL |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and SUN LIFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and SUN LIFE
The main advantage of trading using opposite Microsoft and SUN LIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| SUN LIFE vs. TOREX SEMICONDUCTOR LTD | SUN LIFE vs. UMC Electronics Co | SUN LIFE vs. Magnachip Semiconductor | SUN LIFE vs. Nordic Semiconductor ASA |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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