Correlation Between Sun Life and Wilcon Depot
Can any of the company-specific risk be diversified away by investing in both Sun Life and Wilcon Depot 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 Wilcon Depot 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 Wilcon Depot, you can compare the effects of market volatilities on Sun Life and Wilcon Depot 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 Wilcon Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Wilcon Depot.
Diversification Opportunities for Sun Life and Wilcon Depot
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and Wilcon is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Wilcon Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilcon Depot 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 Wilcon Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilcon Depot has no effect on the direction of Sun Life i.e., Sun Life and Wilcon Depot go up and down completely randomly.
Pair Corralation between Sun Life and Wilcon Depot
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 1.28 times more return on investment than Wilcon Depot. However, Sun Life is 1.28 times more volatile than Wilcon Depot. It trades about 0.05 of its potential returns per unit of risk. Wilcon Depot is currently generating about -0.07 per unit of risk. If you would invest 230,247 in Sun Life Financial on August 28, 2024 and sell it today you would earn a total of 119,753 from holding Sun Life Financial or generate 52.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.0% |
| Values | Daily Returns |
Sun Life Financial vs. Wilcon Depot
Performance |
| Timeline |
| Sun Life Financial |
| Wilcon Depot |
Sun Life and Wilcon Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Wilcon Depot
The main advantage of trading using opposite Sun Life and Wilcon Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, Wilcon Depot 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 Wilcon Depot will offset losses from the drop in Wilcon Depot's long position.| Sun Life vs. National Reinsurance | Sun Life vs. Allhome Corp | Sun Life vs. Jollibee Foods Corp | Sun Life vs. LFM Properties Corp |
| Wilcon Depot vs. Converge Information Communications | Wilcon Depot vs. Top Frontier Investment | Wilcon Depot vs. Jollibee Foods Corp | Wilcon Depot vs. Globe Telecom |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |