Correlation Between Sun Life and HEXWIN

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Can any of the company-specific risk be diversified away by investing in both Sun Life and HEXWIN 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 HEXWIN 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 HEXWIN 5375 31 OCT 26, you can compare the effects of market volatilities on Sun Life and HEXWIN 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 HEXWIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and HEXWIN.

Diversification Opportunities for Sun Life and HEXWIN

-0.18
  Correlation Coefficient

Good diversification

The 3 months correlation between Sun and HEXWIN is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and HEXWIN 5375 31 OCT 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXWIN 5375 31 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 HEXWIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXWIN 5375 31 has no effect on the direction of Sun Life i.e., Sun Life and HEXWIN go up and down completely randomly.

Pair Corralation between Sun Life and HEXWIN

Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.81 times more return on investment than HEXWIN. However, Sun Life Financial is 1.23 times less risky than HEXWIN. It trades about 0.05 of its potential returns per unit of risk. HEXWIN 5375 31 OCT 26 is currently generating about 0.01 per unit of risk. If you would invest  4,371  in Sun Life Financial on January 14, 2025 and sell it today you would earn a total of  1,175  from holding Sun Life Financial or generate 26.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy34.48%
ValuesDaily Returns

Sun Life Financial  vs.  HEXWIN 5375 31 OCT 26

 Performance 
       Timeline  
Sun Life Financial 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Sun Life Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Sun Life is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
HEXWIN 5375 31 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days HEXWIN 5375 31 OCT 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for HEXWIN 5375 31 OCT 26 investors.

Sun Life and HEXWIN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sun Life and HEXWIN

The main advantage of trading using opposite Sun Life and HEXWIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, HEXWIN 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 HEXWIN will offset losses from the drop in HEXWIN's long position.
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The idea behind Sun Life Financial and HEXWIN 5375 31 OCT 26 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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