Correlation Between Sun Life and Manila Mining
Can any of the company-specific risk be diversified away by investing in both Sun Life and Manila Mining 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 Manila Mining 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 Manila Mining Corp, you can compare the effects of market volatilities on Sun Life and Manila Mining 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 Manila Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Manila Mining.
Diversification Opportunities for Sun Life and Manila Mining
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and Manila is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Manila Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manila Mining Corp 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 Manila Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manila Mining Corp has no effect on the direction of Sun Life i.e., Sun Life and Manila Mining go up and down completely randomly.
Pair Corralation between Sun Life and Manila Mining
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 2.48 times more return on investment than Manila Mining. However, Sun Life is 2.48 times more volatile than Manila Mining Corp. It trades about 0.1 of its potential returns per unit of risk. Manila Mining Corp is currently generating about -0.76 per unit of risk. If you would invest 296,963 in Sun Life Financial on August 29, 2024 and sell it today you would earn a total of 23,037 from holding Sun Life Financial or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 47.37% |
| Values | Daily Returns |
Sun Life Financial vs. Manila Mining Corp
Performance |
| Timeline |
| Sun Life Financial |
| Manila Mining Corp |
Sun Life and Manila Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Manila Mining
The main advantage of trading using opposite Sun Life and Manila Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Manila Mining 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 Manila Mining will offset losses from the drop in Manila Mining's long position.| Sun Life vs. Allhome Corp | Sun Life vs. Jollibee Foods Corp | Sun Life vs. LFM Properties Corp | Sun Life vs. PXP Energy Corp |
| Manila Mining vs. Crown Asia Chemicals | Manila Mining vs. Apex Mining Co | Manila Mining vs. Philex Mining Corp | Manila Mining vs. Allhome 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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