Correlation Between Lumia and Sun Peak
Can any of the company-specific risk be diversified away by investing in both Lumia 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 Lumia and Sun Peak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and Sun Peak Metals, you can compare the effects of market volatilities on Lumia 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 Lumia with a short position of Sun Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Sun Peak.
Diversification Opportunities for Lumia and Sun Peak
Excellent diversification
The 3 months correlation between Lumia and Sun is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lumia 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 Lumia 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 Lumia 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 Lumia i.e., Lumia and Sun Peak go up and down completely randomly.
Pair Corralation between Lumia and Sun Peak
Assuming the 90 days trading horizon Lumia is expected to generate 41.63 times more return on investment than Sun Peak. However, Lumia is 41.63 times more volatile than Sun Peak Metals. It trades about 0.2 of its potential returns per unit of risk. Sun Peak Metals is currently generating about -0.01 per unit of risk. If you would invest 0.00 in Lumia on October 10, 2024 and sell it today you would earn a total of 120.00 from holding Lumia or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Lumia vs. Sun Peak Metals
Performance |
| Timeline |
| Lumia |
| Sun Peak Metals |
Lumia and Sun Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Sun Peak
The main advantage of trading using opposite Lumia and Sun Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia 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 Lumia 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. Millbank Mining Corp | Sun Peak vs. Hampton Financial Corp | Sun Peak vs. Fairfax Financial Holdings | Sun Peak vs. VersaBank |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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