Correlation Between Faraday Copper and Sun Peak
Can any of the company-specific risk be diversified away by investing in both Faraday Copper and Sun Peak 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 Faraday Copper and Sun Peak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faraday Copper Corp and Sun Peak Metals, you can compare the effects of market volatilities on Faraday Copper and Sun Peak 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 Faraday Copper with a short position of Sun Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and Sun Peak.
Diversification Opportunities for Faraday Copper and Sun Peak
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Faraday and Sun is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp and Sun Peak Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Peak Metals and Faraday Copper 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 Faraday Copper Corp are associated (or correlated) with Sun Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Peak Metals has no effect on the direction of Faraday Copper i.e., Faraday Copper and Sun Peak go up and down completely randomly.
Pair Corralation between Faraday Copper and Sun Peak
Assuming the 90 days trading horizon Faraday Copper Corp is expected to under-perform the Sun Peak. But the stock apears to be less risky and, when comparing its historical volatility, Faraday Copper Corp is 3.58 times less risky than Sun Peak. The stock trades about -0.07 of its potential returns per unit of risk. The Sun Peak Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Sun Peak Metals on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Sun Peak Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Copper Corp vs. Sun Peak Metals
Performance |
| Timeline |
| Faraday Copper Corp |
| Sun Peak Metals |
Faraday Copper and Sun Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and Sun Peak
The main advantage of trading using opposite Faraday Copper and Sun Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper position performs unexpectedly, Sun Peak 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 Peak will offset losses from the drop in Sun Peak's long position.The idea behind Faraday Copper Corp and Sun Peak Metals 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.| Sun Peak vs. Oncolytics Biotech | Sun Peak vs. Vizsla Silver Corp | Sun Peak vs. Aya Gold Silver | Sun Peak vs. Air Canada |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |