Correlation Between GungHo Online and Sun Life

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

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

Diversification Opportunities for GungHo Online and Sun Life

-0.58

Correlation Coefficient

GungHo Online  Sun Life

Excellent diversification

The 3 months correlation between GungHo and Sun is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment 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 GungHo Online 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 GungHo Online Entertainment 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 GungHo Online i.e., GungHo Online and Sun Life go up and down completely randomly.

Pair Corralation between GungHo Online and Sun Life

Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the Sun Life. In addition to that, GungHo Online is 1.47 times more volatile than Sun Life Financial. It trades about -0.13 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.11 per unit of volatility. If you would invest  4,950  in Sun Life Financial on April 23, 2025 and sell it today you would earn a total of  350.00  from holding Sun Life Financial or generate 7.07% return on investment over 90 days.

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

GungHo Online Entertainment  vs.  Sun Life Financial

GungHo Online Entert

Risk-Adjusted Performance

Very Weak

Over the last 90 days GungHo Online Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sun Life Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sun Life may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with GungHo Online and Sun Life

The main advantage of trading using opposite GungHo Online and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online 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 GungHo Online Entertainment 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.