Correlation Between Sun Life and ON Semiconductor
Can any of the company-specific risk be diversified away by investing in both Sun Life and ON Semiconductor 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 ON Semiconductor 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 ON Semiconductor, you can compare the effects of market volatilities on Sun Life and ON Semiconductor 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 ON Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and ON Semiconductor.
Diversification Opportunities for Sun Life and ON Semiconductor
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and ON Semiconductor is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and ON Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON Semiconductor 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 ON Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ON Semiconductor has no effect on the direction of Sun Life i.e., Sun Life and ON Semiconductor go up and down completely randomly.
Pair Corralation between Sun Life and ON Semiconductor
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.53 times more return on investment than ON Semiconductor. However, Sun Life Financial is 1.88 times less risky than ON Semiconductor. It trades about 0.36 of its potential returns per unit of risk. ON Semiconductor is currently generating about -0.09 per unit of risk. If you would invest 5,600 in Sun Life Financial on August 31, 2024 and sell it today you would earn a total of 539.00 from holding Sun Life Financial or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sun Life Financial vs. ON Semiconductor
Performance |
| Timeline |
| Sun Life Financial |
| ON Semiconductor |
Sun Life and ON Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and ON Semiconductor
The main advantage of trading using opposite Sun Life and ON Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, ON Semiconductor 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 ON Semiconductor will offset losses from the drop in ON Semiconductor's long position.| Sun Life vs. American International Group | Sun Life vs. Hartford Financial Services | Sun Life vs. Goosehead Insurance | Sun Life vs. Enstar Group Limited |
| ON Semiconductor vs. Texas Instruments Incorporated | ON Semiconductor vs. Microchip Technology | ON Semiconductor vs. Analog Devices | ON Semiconductor vs. Qorvo Inc |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |