Correlation Between Sun Life and Integrated Micro
Can any of the company-specific risk be diversified away by investing in both Sun Life and Integrated Micro 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 Integrated Micro 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 Integrated Micro Electronics, you can compare the effects of market volatilities on Sun Life and Integrated Micro 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 Integrated Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Integrated Micro.
Diversification Opportunities for Sun Life and Integrated Micro
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Integrated is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele 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 Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of Sun Life i.e., Sun Life and Integrated Micro go up and down completely randomly.
Pair Corralation between Sun Life and Integrated Micro
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 2.08 times more return on investment than Integrated Micro. However, Sun Life is 2.08 times more volatile than Integrated Micro Electronics. It trades about 0.2 of its potential returns per unit of risk. Integrated Micro Electronics is currently generating about -0.03 per unit of risk. If you would invest 296,978 in Sun Life Financial on August 31, 2024 and sell it today you would earn a total of 58,022 from holding Sun Life Financial or generate 19.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Sun Life Financial vs. Integrated Micro Electronics
Performance |
| Timeline |
| Sun Life Financial |
| Integrated Micro Ele |
Sun Life and Integrated Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Integrated Micro
The main advantage of trading using opposite Sun Life and Integrated Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Integrated Micro 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 Integrated Micro will offset losses from the drop in Integrated Micro's long position.| Sun Life vs. Manulife Financial Corp | Sun Life vs. National Reinsurance | Sun Life vs. GT Capital Holdings | Sun Life vs. Allhome Corp |
| Integrated Micro vs. GT Capital Holdings | Integrated Micro vs. Allhome Corp | Integrated Micro vs. Jollibee Foods Corp | Integrated Micro 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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