Correlation Between Sun Summit and Progressive Planet
Can any of the company-specific risk be diversified away by investing in both Sun Summit and Progressive Planet 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 Summit and Progressive Planet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Summit Minerals and Progressive Planet Solutions, you can compare the effects of market volatilities on Sun Summit and Progressive Planet 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 Summit with a short position of Progressive Planet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Summit and Progressive Planet.
Diversification Opportunities for Sun Summit and Progressive Planet
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sun and Progressive is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sun Summit Minerals and Progressive Planet Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive Planet and Sun Summit 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 Summit Minerals are associated (or correlated) with Progressive Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Planet has no effect on the direction of Sun Summit i.e., Sun Summit and Progressive Planet go up and down completely randomly.
Pair Corralation between Sun Summit and Progressive Planet
Assuming the 90 days horizon Sun Summit Minerals is expected to generate 3.02 times more return on investment than Progressive Planet. However, Sun Summit is 3.02 times more volatile than Progressive Planet Solutions. It trades about 0.06 of its potential returns per unit of risk. Progressive Planet Solutions is currently generating about 0.02 per unit of risk. If you would invest 9.62 in Sun Summit Minerals on August 28, 2024 and sell it today you would earn a total of 0.13 from holding Sun Summit Minerals or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.7% |
| Values | Daily Returns |
Sun Summit Minerals vs. Progressive Planet Solutions
Performance |
| Timeline |
| Sun Summit Minerals |
| Progressive Planet |
Sun Summit and Progressive Planet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Summit and Progressive Planet
The main advantage of trading using opposite Sun Summit and Progressive Planet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Summit position performs unexpectedly, Progressive Planet 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 Progressive Planet will offset losses from the drop in Progressive Planet's long position.| Sun Summit vs. Ascendant Resources | Sun Summit vs. Cantex Mine Development | Sun Summit vs. Amarc Resources | Sun Summit vs. Sterling Metals Corp |
| Progressive Planet vs. Avarone Metals | Progressive Planet vs. Amarc Resources | Progressive Planet vs. Huntsman Exploration | Progressive Planet vs. Adriatic Metals PLC |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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