Correlation Between Summit Resources and VanEck FTSE
Can any of the company-specific risk be diversified away by investing in both Summit Resources and VanEck FTSE 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 Summit Resources and VanEck FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Resources Limited and VanEck FTSE Global, you can compare the effects of market volatilities on Summit Resources and VanEck FTSE 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 Summit Resources with a short position of VanEck FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Resources and VanEck FTSE.
Diversification Opportunities for Summit Resources and VanEck FTSE
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Summit and VanEck is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Summit Resources Limited and VanEck FTSE Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck FTSE Global and Summit Resources 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 Summit Resources Limited are associated (or correlated) with VanEck FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck FTSE Global has no effect on the direction of Summit Resources i.e., Summit Resources and VanEck FTSE go up and down completely randomly.
Pair Corralation between Summit Resources and VanEck FTSE
Assuming the 90 days trading horizon Summit Resources Limited is expected to generate 107.24 times more return on investment than VanEck FTSE. However, Summit Resources is 107.24 times more volatile than VanEck FTSE Global. It trades about 0.15 of its potential returns per unit of risk. VanEck FTSE Global is currently generating about 0.22 per unit of risk. If you would invest 0.35 in Summit Resources Limited on August 30, 2024 and sell it today you would lose (0.05) from holding Summit Resources Limited or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Resources Limited vs. VanEck FTSE Global
Performance |
| Timeline |
| Summit Resources |
| VanEck FTSE Global |
Summit Resources and VanEck FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Resources and VanEck FTSE
The main advantage of trading using opposite Summit Resources and VanEck FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Resources position performs unexpectedly, VanEck FTSE 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 VanEck FTSE will offset losses from the drop in VanEck FTSE's long position.| Summit Resources vs. Talisman Mining | Summit Resources vs. Hotel Property Investments | Summit Resources vs. Metro Mining | Summit Resources vs. MFF Capital Investments |
| VanEck FTSE vs. ETFS Morningstar Global | VanEck FTSE vs. BetaShares Geared Equity | VanEck FTSE vs. VanEck Vectors Australian | VanEck FTSE vs. SPDR SPASX 200 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |