Correlation Between CAT Strategic and Sun Summit
Can any of the company-specific risk be diversified away by investing in both CAT Strategic 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 CAT Strategic and Sun Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAT Strategic Metals and Sun Summit Minerals, you can compare the effects of market volatilities on CAT Strategic 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 CAT Strategic with a short position of Sun Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAT Strategic and Sun Summit.
Diversification Opportunities for CAT Strategic and Sun Summit
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAT and Sun is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding CAT Strategic Metals 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 CAT Strategic 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 CAT Strategic Metals 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 CAT Strategic i.e., CAT Strategic and Sun Summit go up and down completely randomly.
Pair Corralation between CAT Strategic and Sun Summit
Assuming the 90 days horizon CAT Strategic Metals is expected to generate 4.28 times more return on investment than Sun Summit. However, CAT Strategic is 4.28 times more volatile than Sun Summit Minerals. It trades about 0.23 of its potential returns per unit of risk. Sun Summit Minerals is currently generating about -0.23 per unit of risk. If you would invest 0.14 in CAT Strategic Metals on August 25, 2024 and sell it today you would earn a total of 0.26 from holding CAT Strategic Metals or generate 185.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CAT Strategic Metals vs. Sun Summit Minerals
Performance |
| Timeline |
| CAT Strategic Metals |
| Sun Summit Minerals |
CAT Strategic and Sun Summit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAT Strategic and Sun Summit
The main advantage of trading using opposite CAT Strategic and Sun Summit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAT Strategic 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.| CAT Strategic vs. Glen Eagle Resources | CAT Strategic vs. Grizzly Discoveries | CAT Strategic vs. Silver Dollar Resources | CAT Strategic vs. Defense Metals Corp |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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