Correlation Between STI Education and Sun Life
Can any of the company-specific risk be diversified away by investing in both STI Education and Sun Life 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 STI Education and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STI Education Systems and Sun Life Financial, you can compare the effects of market volatilities on STI Education and Sun Life 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 STI Education with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of STI Education and Sun Life.
Diversification Opportunities for STI Education and Sun Life
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STI and Sun is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding STI Education Systems and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial and STI Education 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 STI Education Systems are associated (or correlated) with Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of STI Education i.e., STI Education and Sun Life go up and down completely randomly.
Pair Corralation between STI Education and Sun Life
Assuming the 90 days trading horizon STI Education Systems is expected to generate 0.9 times more return on investment than Sun Life. However, STI Education Systems is 1.11 times less risky than Sun Life. It trades about 0.14 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.05 per unit of risk. If you would invest 29.00 in STI Education Systems on August 25, 2024 and sell it today you would earn a total of 99.00 from holding STI Education Systems or generate 341.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.05% |
| Values | Daily Returns |
STI Education Systems vs. Sun Life Financial
Performance |
| Timeline |
| STI Education Systems |
| Sun Life Financial |
STI Education and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STI Education and Sun Life
The main advantage of trading using opposite STI Education and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STI Education position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| STI Education vs. Allhome Corp | STI Education vs. Altus Property Ventures | STI Education vs. AgriNurture | STI Education vs. Wilcon Depot |
| Sun Life vs. Manulife Financial Corp | Sun Life vs. National Reinsurance | Sun Life vs. Allhome Corp | Sun Life vs. Jollibee Foods Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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