Correlation Between Sun Lif and Gamehost

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

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

Diversification Opportunities for Sun Lif and Gamehost

-0.19

Correlation Coefficient

Sun Lif  Gamehost

Good diversification

The 3 months correlation between Sun and Gamehost is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sun Lif Non and Gamehost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamehost and Sun Lif 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 Lif Non are associated (or correlated) with Gamehost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamehost has no effect on the direction of Sun Lif i.e., Sun Lif and Gamehost go up and down completely randomly.

Pair Corralation between Sun Lif and Gamehost

Assuming the 90 days trading horizon Sun Lif Non is expected to generate 0.87 times more return on investment than Gamehost. However, Sun Lif Non is 1.15 times less risky than Gamehost. It trades about 0.17 of its potential returns per unit of risk. Gamehost is currently generating about -0.02 per unit of risk. If you would invest  1,909  in Sun Lif Non on October 25, 2024 and sell it today you would earn a total of  172.00  from holding Sun Lif Non or generate 9.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sun Lif Non  vs.  Gamehost

Sun Lif Non

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Lif Non are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Sun Lif may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Gamehost

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamehost has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Gamehost is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sun Lif and Gamehost

The main advantage of trading using opposite Sun Lif and Gamehost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Lif position performs unexpectedly, Gamehost 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 Gamehost will offset losses from the drop in Gamehost's long position.

The idea behind Sun Lif Non and Gamehost 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.