Correlation Between Sun Life and Gelteq Limited

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

Diversification Opportunities for Sun Life and Gelteq Limited

0.73

Correlation Coefficient

Sun Life  Gelteq Limited

Poor diversification

The 3 months correlation between Sun and Gelteq is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and Gelteq Limited Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelteq Limited Ordinary 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 Gelteq Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelteq Limited Ordinary has no effect on the direction of Sun Life i.e., Sun Life and Gelteq Limited go up and down completely randomly.

Pair Corralation between Sun Life and Gelteq Limited

Considering the 90-day investment horizon Sun Life Financial is expected to generate 0.17 times more return on investment than Gelteq Limited. However, Sun Life Financial is 5.95 times less risky than Gelteq Limited. It trades about -0.05 of its potential returns per unit of risk. Gelteq Limited Ordinary is currently generating about -0.17 per unit of risk. If you would invest  5,888  in Sun Life Financial on December 17, 2024 and sell it today you would lose (237.00) from holding Sun Life Financial or give up 4.03% of portfolio value over 90 days.

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

Sun Life Financial  vs.  Gelteq Limited Ordinary

Sun Life Financial

Risk-Adjusted Performance

Very Weak

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.

Gelteq Limited Ordinary

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sun Life and Gelteq Limited

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

The idea behind Sun Life Financial and Gelteq Limited Ordinary 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.