Correlation Between Sun Life and PT Indofood
Can any of the company-specific risk be diversified away by investing in both Sun Life and PT Indofood 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 PT Indofood 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 PT Indofood Sukses, you can compare the effects of market volatilities on Sun Life and PT Indofood 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 PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and PT Indofood.
Diversification Opportunities for Sun Life and PT Indofood
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sun and PIFMF is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and PT Indofood Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indofood Sukses 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 PT Indofood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indofood Sukses has no effect on the direction of Sun Life i.e., Sun Life and PT Indofood go up and down completely randomly.
Pair Corralation between Sun Life and PT Indofood
Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.86 times more return on investment than PT Indofood. However, Sun Life Financial is 1.16 times less risky than PT Indofood. It trades about 0.09 of its potential returns per unit of risk. PT Indofood Sukses is currently generating about -0.01 per unit of risk. If you would invest 4,890 in Sun Life Financial on September 2, 2024 and sell it today you would earn a total of 1,249 from holding Sun Life Financial or generate 25.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 58.87% |
| Values | Daily Returns |
Sun Life Financial vs. PT Indofood Sukses
Performance |
| Timeline |
| Sun Life Financial |
| PT Indofood Sukses |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sun Life and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and PT Indofood
The main advantage of trading using opposite Sun Life and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, PT Indofood 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 PT Indofood will offset losses from the drop in PT Indofood's long position.| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
| PT Indofood vs. Sun Life Financial | PT Indofood vs. Guangdong Investment Limited | PT Indofood vs. Western Asset Investment | PT Indofood vs. Allegiant Travel |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |