Correlation Between Sun Life and Century Pacific
Can any of the company-specific risk be diversified away by investing in both Sun Life and Century Pacific 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 Century Pacific 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 Century Pacific Food, you can compare the effects of market volatilities on Sun Life and Century Pacific 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 Century Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Century Pacific.
Diversification Opportunities for Sun Life and Century Pacific
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sun and Century is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Century Pacific Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Pacific Food 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 Century Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Pacific Food has no effect on the direction of Sun Life i.e., Sun Life and Century Pacific go up and down completely randomly.
Pair Corralation between Sun Life and Century Pacific
Assuming the 90 days trading horizon Sun Life is expected to generate 1.13 times less return on investment than Century Pacific. In addition to that, Sun Life is 2.16 times more volatile than Century Pacific Food. It trades about 0.05 of its total potential returns per unit of risk. Century Pacific Food is currently generating about 0.13 per unit of volatility. If you would invest 3,635 in Century Pacific Food on August 29, 2024 and sell it today you would earn a total of 535.00 from holding Century Pacific Food or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.5% |
| Values | Daily Returns |
Sun Life Financial vs. Century Pacific Food
Performance |
| Timeline |
| Sun Life Financial |
| Century Pacific Food |
Sun Life and Century Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Century Pacific
The main advantage of trading using opposite Sun Life and Century Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Century Pacific 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 Century Pacific will offset losses from the drop in Century Pacific's long position.| Sun Life vs. Atlas Consolidated Mining | Sun Life vs. Metropolitan Bank Trust | Sun Life vs. Union Bank of | Sun Life vs. Pacificonline Systems |
| Century Pacific vs. Swift Foods | Century Pacific vs. Allhome Corp | Century Pacific vs. Jollibee Foods Corp | Century Pacific 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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