Correlation Between Sun Life and Cebu Landmasters
Can any of the company-specific risk be diversified away by investing in both Sun Life and Cebu Landmasters 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 Cebu Landmasters 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 Cebu Landmasters, you can compare the effects of market volatilities on Sun Life and Cebu Landmasters 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 Cebu Landmasters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Cebu Landmasters.
Diversification Opportunities for Sun Life and Cebu Landmasters
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sun and Cebu is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Cebu Landmasters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Landmasters 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 Cebu Landmasters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Landmasters has no effect on the direction of Sun Life i.e., Sun Life and Cebu Landmasters go up and down completely randomly.
Pair Corralation between Sun Life and Cebu Landmasters
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 2.87 times more return on investment than Cebu Landmasters. However, Sun Life is 2.87 times more volatile than Cebu Landmasters. It trades about 0.21 of its potential returns per unit of risk. Cebu Landmasters is currently generating about -0.04 per unit of risk. If you would invest 306,878 in Sun Life Financial on September 13, 2024 and sell it today you would earn a total of 51,122 from holding Sun Life Financial or generate 16.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Sun Life Financial vs. Cebu Landmasters
Performance |
| Timeline |
| Sun Life Financial |
| Cebu Landmasters |
Sun Life and Cebu Landmasters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Cebu Landmasters
The main advantage of trading using opposite Sun Life and Cebu Landmasters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Cebu Landmasters 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 Cebu Landmasters will offset losses from the drop in Cebu Landmasters' long position.| Sun Life vs. Philippine Business Bank | Sun Life vs. Integrated Micro Electronics | Sun Life vs. BDO Unibank | Sun Life vs. Converge Information Communications |
| Cebu Landmasters vs. COL Financial Group | Cebu Landmasters vs. Security Bank Corp | Cebu Landmasters vs. Philippine Savings Bank | Cebu Landmasters 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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