Correlation Between SUN and FINCORP INVESTMENT

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

By analyzing existing cross correlation between SUN LIMITED and FINCORP INVESTMENT LTD, you can compare the effects of market volatilities on SUN and FINCORP INVESTMENT 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 with a short position of FINCORP INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN and FINCORP INVESTMENT.

Diversification Opportunities for SUN and FINCORP INVESTMENT

-0.27

Correlation Coefficient

SUN  FINCORP INVESTMENT

Very good diversification

The 3 months correlation between SUN and FINCORP is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SUN LIMITED and FINCORP INVESTMENT LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FINCORP INVESTMENT LTD and SUN 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 LIMITED are associated (or correlated) with FINCORP INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FINCORP INVESTMENT LTD has no effect on the direction of SUN i.e., SUN and FINCORP INVESTMENT go up and down completely randomly.

Pair Corralation between SUN and FINCORP INVESTMENT

Assuming the 90 days trading horizon SUN LIMITED is expected to generate 1.95 times more return on investment than FINCORP INVESTMENT. However, SUN is 1.95 times more volatile than FINCORP INVESTMENT LTD. It trades about 0.05 of its potential returns per unit of risk. FINCORP INVESTMENT LTD is currently generating about 0.02 per unit of risk. If you would invest  3,545  in SUN LIMITED on April 23, 2025 and sell it today you would earn a total of  255.00  from holding SUN LIMITED or generate 7.19% return on investment over 90 days.

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

SUN LIMITED  vs.  FINCORP INVESTMENT LTD

SUN LIMITED

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SUN LIMITED are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, SUN may actually be approaching a critical reversion point that can send shares even higher in August 2025.

FINCORP INVESTMENT LTD

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FINCORP INVESTMENT LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, FINCORP INVESTMENT is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SUN and FINCORP INVESTMENT

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

The idea behind SUN LIMITED and FINCORP INVESTMENT LTD 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.