Correlation Between Sun Life and KTRA Old

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

Diversification Opportunities for Sun Life and KTRA Old

-0.43

Correlation Coefficient

Sun Life  KTRA Old

Very good diversification

The 3 months correlation between Sun and KTRA is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and KTRA Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTRA Old 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 KTRA Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTRA Old has no effect on the direction of Sun Life i.e., Sun Life and KTRA Old go up and down completely randomly.

Pair Corralation between Sun Life and KTRA Old

If you would invest  630.00  in KTRA Old on October 12, 2024 and sell it today you would earn a total of  0.00  from holding KTRA Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Sun Life Financial  vs.  KTRA Old

Sun Life Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

KTRA Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KTRA Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sun Life and KTRA Old

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

The idea behind Sun Life Financial and KTRA Old 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.