Correlation Between Sun Life and Harbor Star
Can any of the company-specific risk be diversified away by investing in both Sun Life and Harbor Star 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 Harbor Star 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 Harbor Star Shipping, you can compare the effects of market volatilities on Sun Life and Harbor Star 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 Harbor Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Harbor Star.
Diversification Opportunities for Sun Life and Harbor Star
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Harbor is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Harbor Star Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Star Shipping 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 Harbor Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Star Shipping has no effect on the direction of Sun Life i.e., Sun Life and Harbor Star go up and down completely randomly.
Pair Corralation between Sun Life and Harbor Star
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 1.04 times more return on investment than Harbor Star. However, Sun Life is 1.04 times more volatile than Harbor Star Shipping. It trades about 0.06 of its potential returns per unit of risk. Harbor Star Shipping is currently generating about -0.02 per unit of risk. If you would invest 227,928 in Sun Life Financial on September 4, 2024 and sell it today you would earn a total of 131,872 from holding Sun Life Financial or generate 57.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.09% |
| Values | Daily Returns |
Sun Life Financial vs. Harbor Star Shipping
Performance |
| Timeline |
| Sun Life Financial |
| Harbor Star Shipping |
Sun Life and Harbor Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Harbor Star
The main advantage of trading using opposite Sun Life and Harbor Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Harbor Star 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 Harbor Star will offset losses from the drop in Harbor Star's long position.| Sun Life vs. Manulife Financial Corp | Sun Life vs. GT Capital Holdings | Sun Life vs. Allhome Corp | Sun Life vs. Jollibee Foods Corp |
| Harbor Star vs. STI Education Systems | Harbor Star vs. Sun Life Financial | Harbor Star vs. Semirara Mining Corp | Harbor Star vs. Philippine Business Bank |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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