Correlation Between Ascendant Resources and Sun Summit
Can any of the company-specific risk be diversified away by investing in both Ascendant Resources and Sun Summit 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 Ascendant Resources and Sun Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendant Resources and Sun Summit Minerals, you can compare the effects of market volatilities on Ascendant Resources and Sun Summit 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 Ascendant Resources with a short position of Sun Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendant Resources and Sun Summit.
Diversification Opportunities for Ascendant Resources and Sun Summit
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ascendant and Sun is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ascendant Resources and Sun Summit Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Summit Minerals and Ascendant Resources 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 Ascendant Resources are associated (or correlated) with Sun Summit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Summit Minerals has no effect on the direction of Ascendant Resources i.e., Ascendant Resources and Sun Summit go up and down completely randomly.
Pair Corralation between Ascendant Resources and Sun Summit
Assuming the 90 days horizon Ascendant Resources is expected to generate 1.19 times more return on investment than Sun Summit. However, Ascendant Resources is 1.19 times more volatile than Sun Summit Minerals. It trades about 0.03 of its potential returns per unit of risk. Sun Summit Minerals is currently generating about -0.01 per unit of risk. If you would invest 4.00 in Ascendant Resources on August 25, 2024 and sell it today you would lose (0.81) from holding Ascendant Resources or give up 20.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascendant Resources vs. Sun Summit Minerals
Performance |
| Timeline |
| Ascendant Resources |
| Sun Summit Minerals |
Ascendant Resources and Sun Summit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendant Resources and Sun Summit
The main advantage of trading using opposite Ascendant Resources and Sun Summit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendant Resources position performs unexpectedly, Sun Summit 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 Summit will offset losses from the drop in Sun Summit's long position.| Ascendant Resources vs. Norra Metals Corp | Ascendant Resources vs. ZincX Resources Corp | Ascendant Resources vs. Nuinsco Resources Limited | Ascendant Resources vs. South Star Battery |
| Sun Summit vs. Ascendant Resources | Sun Summit vs. Cantex Mine Development | Sun Summit vs. Amarc Resources | Sun Summit vs. Sterling Metals Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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