Correlation Between Philex Mining and Sun Life

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

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

Diversification Opportunities for Philex Mining and Sun Life

0.04

Correlation Coefficient

Philex Mining  Sun Life

Significant diversification

The 3 months correlation between Philex and Sun is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Philex Mining Corp 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 Philex Mining 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 Philex Mining Corp 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 Philex Mining i.e., Philex Mining and Sun Life go up and down completely randomly.

Pair Corralation between Philex Mining and Sun Life

Assuming the 90 days trading horizon Philex Mining Corp is expected to under-perform the Sun Life. In addition to that, Philex Mining is 1.75 times more volatile than Sun Life Financial. It trades about -0.08 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.16 per unit of volatility. If you would invest  296,969  in Sun Life Financial on April 24, 2025 and sell it today you would earn a total of  43,631  from holding Sun Life Financial or generate 14.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	83.33%
Values	Daily Returns

Philex Mining Corp  vs.  Sun Life Financial

Philex Mining Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Philex Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Sun Life Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Life Financial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sun Life exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Philex Mining and Sun Life

The main advantage of trading using opposite Philex Mining and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philex Mining 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 Philex Mining Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.