Correlation Between Sun Peak and AKITA Drilling
Can any of the company-specific risk be diversified away by investing in both Sun Peak and AKITA Drilling 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 Sun Peak and AKITA Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Peak Metals and AKITA Drilling, you can compare the effects of market volatilities on Sun Peak and AKITA Drilling 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 Sun Peak with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Peak and AKITA Drilling.
Diversification Opportunities for Sun Peak and AKITA Drilling
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and AKITA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sun Peak Metals and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Sun Peak 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 Sun Peak Metals are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Sun Peak i.e., Sun Peak and AKITA Drilling go up and down completely randomly.
Pair Corralation between Sun Peak and AKITA Drilling
Assuming the 90 days trading horizon Sun Peak Metals is expected to under-perform the AKITA Drilling. In addition to that, Sun Peak is 2.9 times more volatile than AKITA Drilling. It trades about -0.04 of its total potential returns per unit of risk. AKITA Drilling is currently generating about 0.09 per unit of volatility. If you would invest 165.00 in AKITA Drilling on October 11, 2024 and sell it today you would earn a total of 5.00 from holding AKITA Drilling or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Peak Metals vs. AKITA Drilling
Performance |
| Timeline |
| Sun Peak Metals |
| AKITA Drilling |
Sun Peak and AKITA Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Peak and AKITA Drilling
The main advantage of trading using opposite Sun Peak and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Peak position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.| Sun Peak vs. SalesforceCom CDR | Sun Peak vs. Diversified Royalty Corp | Sun Peak vs. Economic Investment Trust | Sun Peak vs. Precision Drilling |
| AKITA Drilling vs. Ensign Energy Services | AKITA Drilling vs. Total Energy Services | AKITA Drilling vs. PHX Energy Services | AKITA Drilling vs. Western Energy Services |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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