Correlation Between New Pacific and Summa Silver
Can any of the company-specific risk be diversified away by investing in both New Pacific and Summa Silver 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 New Pacific and Summa Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Pacific Metals and Summa Silver Corp, you can compare the effects of market volatilities on New Pacific and Summa Silver 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 New Pacific with a short position of Summa Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Pacific and Summa Silver.
Diversification Opportunities for New Pacific and Summa Silver
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between New and Summa is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding New Pacific Metals and Summa Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summa Silver Corp and New Pacific 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 New Pacific Metals are associated (or correlated) with Summa Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summa Silver Corp has no effect on the direction of New Pacific i.e., New Pacific and Summa Silver go up and down completely randomly.
Pair Corralation between New Pacific and Summa Silver
Given the investment horizon of 90 days New Pacific Metals is expected to generate 1.04 times more return on investment than Summa Silver. However, New Pacific is 1.04 times more volatile than Summa Silver Corp. It trades about 0.06 of its potential returns per unit of risk. Summa Silver Corp is currently generating about 0.02 per unit of risk. If you would invest 147.00 in New Pacific Metals on September 14, 2024 and sell it today you would earn a total of 5.00 from holding New Pacific Metals or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Pacific Metals vs. Summa Silver Corp
Performance |
| Timeline |
| New Pacific Metals |
| Summa Silver Corp |
New Pacific and Summa Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Pacific and Summa Silver
The main advantage of trading using opposite New Pacific and Summa Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Pacific position performs unexpectedly, Summa Silver 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 Summa Silver will offset losses from the drop in Summa Silver's long position.| New Pacific vs. Endeavour Silver Corp | New Pacific vs. Metalla Royalty Streaming | New Pacific vs. Hecla Mining | New Pacific vs. Gatos Silver |
| Summa Silver vs. P2 Gold | Summa Silver vs. Enduro Metals | Summa Silver vs. Kodiak Copper Corp | Summa Silver vs. Mirasol Resources |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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