Correlation Between Cirtek Holdings and Sun Life

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

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

Diversification Opportunities for Cirtek Holdings and Sun Life

-0.37

Correlation Coefficient

Cirtek Holdings  Sun Life

Very good diversification

The 3 months correlation between Cirtek and Sun is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cirtek Holdings Philippines 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 Cirtek Holdings 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 Cirtek Holdings Philippines 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 Cirtek Holdings i.e., Cirtek Holdings and Sun Life go up and down completely randomly.

Pair Corralation between Cirtek Holdings and Sun Life

Assuming the 90 days trading horizon Cirtek Holdings is expected to generate 1.94 times less return on investment than Sun Life. In addition to that, Cirtek Holdings is 2.2 times more volatile than Sun Life Financial. It trades about 0.01 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.04 per unit of volatility. If you would invest  227,928  in Sun Life Financial on September 24, 2024 and sell it today you would earn a total of  72,672  from holding Sun Life Financial or generate 31.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	54.78%
Values	Daily Returns

Cirtek Holdings Philippines  vs.  Sun Life Financial

Cirtek Holdings Phil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cirtek Holdings Philippines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Sun Life Financial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Sun Life may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cirtek Holdings and Sun Life

The main advantage of trading using opposite Cirtek Holdings and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cirtek Holdings 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 Cirtek Holdings Philippines 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.