Correlation Between Skycity Entertainment and Summit Resources
Can any of the company-specific risk be diversified away by investing in both Skycity Entertainment and Summit Resources 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 Skycity Entertainment and Summit Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skycity Entertainment Group and Summit Resources Limited, you can compare the effects of market volatilities on Skycity Entertainment and Summit Resources 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 Skycity Entertainment with a short position of Summit Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skycity Entertainment and Summit Resources.
Diversification Opportunities for Skycity Entertainment and Summit Resources
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Skycity and Summit is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Skycity Entertainment Group and Summit Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Resources and Skycity Entertainment 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 Skycity Entertainment Group are associated (or correlated) with Summit Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Resources has no effect on the direction of Skycity Entertainment i.e., Skycity Entertainment and Summit Resources go up and down completely randomly.
Pair Corralation between Skycity Entertainment and Summit Resources
Assuming the 90 days trading horizon Skycity Entertainment is expected to generate 58.94 times less return on investment than Summit Resources. But when comparing it to its historical volatility, Skycity Entertainment Group is 28.44 times less risky than Summit Resources. It trades about 0.1 of its potential returns per unit of risk. Summit Resources Limited is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 0.35 in Summit Resources Limited on September 1, 2024 and sell it today you would earn a total of 0.95 from holding Summit Resources Limited or generate 271.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skycity Entertainment Group vs. Summit Resources Limited
Performance |
| Timeline |
| Skycity Entertainment |
| Summit Resources |
Skycity Entertainment and Summit Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skycity Entertainment and Summit Resources
The main advantage of trading using opposite Skycity Entertainment and Summit Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skycity Entertainment position performs unexpectedly, Summit Resources 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 Summit Resources will offset losses from the drop in Summit Resources' long position.| Skycity Entertainment vs. iShares Global Healthcare | Skycity Entertainment vs. Australian Dairy Farms | Skycity Entertainment vs. Adriatic Metals Plc | Skycity Entertainment vs. Australian Agricultural |
| Summit Resources vs. Northern Star Resources | Summit Resources vs. Evolution Mining | Summit Resources vs. Bluescope Steel | Summit Resources vs. Sandfire Resources NL |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |