Correlation Between Sun Life and Philippine Savings
Can any of the company-specific risk be diversified away by investing in both Sun Life and Philippine Savings 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 Philippine Savings 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 Philippine Savings Bank, you can compare the effects of market volatilities on Sun Life and Philippine Savings 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 Philippine Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Philippine Savings.
Diversification Opportunities for Sun Life and Philippine Savings
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Philippine is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Philippine Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philippine Savings Bank 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 Philippine Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philippine Savings Bank has no effect on the direction of Sun Life i.e., Sun Life and Philippine Savings go up and down completely randomly.
Pair Corralation between Sun Life and Philippine Savings
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 1.6 times more return on investment than Philippine Savings. However, Sun Life is 1.6 times more volatile than Philippine Savings Bank. It trades about 0.05 of its potential returns per unit of risk. Philippine Savings Bank is currently generating about 0.03 per unit of risk. If you would invest 243,135 in Sun Life Financial on August 29, 2024 and sell it today you would earn a total of 76,865 from holding Sun Life Financial or generate 31.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.83% |
| Values | Daily Returns |
Sun Life Financial vs. Philippine Savings Bank
Performance |
| Timeline |
| Sun Life Financial |
| Philippine Savings Bank |
Sun Life and Philippine Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Philippine Savings
The main advantage of trading using opposite Sun Life and Philippine Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Philippine Savings 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 Philippine Savings will offset losses from the drop in Philippine Savings' 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 |
| Philippine Savings vs. Allhome Corp | Philippine Savings vs. Semirara Mining Corp | Philippine Savings vs. SM Investments Corp | Philippine Savings vs. Top Frontier Investment |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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