Correlation Between Sun Summit and Arizona Metals
Can any of the company-specific risk be diversified away by investing in both Sun Summit and Arizona Metals 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 Arizona Metals 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 Arizona Metals Corp, you can compare the effects of market volatilities on Sun Summit and Arizona Metals 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 Arizona Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Summit and Arizona Metals.
Diversification Opportunities for Sun Summit and Arizona Metals
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Arizona is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sun Summit Minerals and Arizona Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Metals Corp 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 Arizona Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Metals Corp has no effect on the direction of Sun Summit i.e., Sun Summit and Arizona Metals go up and down completely randomly.
Pair Corralation between Sun Summit and Arizona Metals
Assuming the 90 days horizon Sun Summit Minerals is expected to under-perform the Arizona Metals. In addition to that, Sun Summit is 2.08 times more volatile than Arizona Metals Corp. It trades about -0.02 of its total potential returns per unit of risk. Arizona Metals Corp is currently generating about -0.01 per unit of volatility. If you would invest 173.00 in Arizona Metals Corp on September 2, 2024 and sell it today you would lose (28.00) from holding Arizona Metals Corp or give up 16.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Summit Minerals vs. Arizona Metals Corp
Performance |
| Timeline |
| Sun Summit Minerals |
| Arizona Metals Corp |
Sun Summit and Arizona Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Summit and Arizona Metals
The main advantage of trading using opposite Sun Summit and Arizona Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Summit position performs unexpectedly, Arizona Metals 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 Arizona Metals will offset losses from the drop in Arizona Metals' long position.| Sun Summit vs. South32 Limited | Sun Summit vs. NioCorp Developments Ltd | Sun Summit vs. HUMANA INC | Sun Summit vs. SCOR PK |
| Arizona Metals vs. ATT Inc | Arizona Metals vs. Merck Company | Arizona Metals vs. Walt Disney | Arizona Metals vs. Caterpillar |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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