Correlation Between Neo Battery and Sun Summit
Can any of the company-specific risk be diversified away by investing in both Neo Battery 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 Neo Battery and Sun Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neo Battery Materials and Sun Summit Minerals, you can compare the effects of market volatilities on Neo Battery 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 Neo Battery with a short position of Sun Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neo Battery and Sun Summit.
Diversification Opportunities for Neo Battery and Sun Summit
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Neo and Sun is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Neo Battery Materials 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 Neo Battery 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 Neo Battery Materials 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 Neo Battery i.e., Neo Battery and Sun Summit go up and down completely randomly.
Pair Corralation between Neo Battery and Sun Summit
Assuming the 90 days horizon Neo Battery Materials is expected to generate 3.86 times more return on investment than Sun Summit. However, Neo Battery is 3.86 times more volatile than Sun Summit Minerals. It trades about 0.1 of its potential returns per unit of risk. Sun Summit Minerals is currently generating about 0.06 per unit of risk. If you would invest 16.00 in Neo Battery Materials on September 3, 2024 and sell it today you would earn a total of 47.00 from holding Neo Battery Materials or generate 293.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.5% |
| Values | Daily Returns |
Neo Battery Materials vs. Sun Summit Minerals
Performance |
| Timeline |
| Neo Battery Materials |
| Sun Summit Minerals |
Neo Battery and Sun Summit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neo Battery and Sun Summit
The main advantage of trading using opposite Neo Battery and Sun Summit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neo Battery 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.| Neo Battery vs. Qubec Nickel Corp | Neo Battery vs. IGO Limited | Neo Battery vs. Avarone Metals | Neo Battery vs. Adriatic Metals PLC |
| Sun Summit vs. Durango Resources | Sun Summit vs. Avarone Metals | Sun Summit vs. Amarc Resources | Sun Summit vs. Pampa Metals |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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