Correlation Between Pacificonline Systems and Sun Life

Can any of the company-specific risk be diversified away by investing in both Pacificonline Systems 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 Pacificonline Systems and Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pacificonline Systems and Sun Life Financial, you can compare the effects of market volatilities on Pacificonline Systems 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 Pacificonline Systems with a short position of Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacificonline Systems and Sun Life.

Diversification Opportunities for Pacificonline Systems and Sun Life

-0.79

Correlation Coefficient

Pacificonline Systems  Sun Life

Pay attention - limited upside

The 3 months correlation between Pacificonline and Sun is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pacificonline 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 Pacificonline Systems 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 Pacificonline 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 Pacificonline Systems i.e., Pacificonline Systems and Sun Life go up and down completely randomly.

Pair Corralation between Pacificonline Systems and Sun Life

Assuming the 90 days trading horizon Pacificonline Systems is expected to generate 1.58 times more return on investment than Sun Life. However, Pacificonline Systems is 1.58 times more volatile than Sun Life Financial. It trades about 0.05 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  152.00  in Pacificonline Systems on September 15, 2024 and sell it today you would earn a total of  98.00  from holding Pacificonline Systems or generate 64.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	91.67%
Values	Daily Returns

Pacificonline Systems  vs.  Sun Life Financial

Pacificonline Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacificonline Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sun Life Financial

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Sun Life Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unsteady technical and fundamental indicators, Sun Life exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pacificonline Systems and Sun Life

The main advantage of trading using opposite Pacificonline Systems and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacificonline Systems 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.

The idea behind Pacificonline Systems and Sun Life Financial 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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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 .