Correlation Between Sun Summit and First American
Can any of the company-specific risk be diversified away by investing in both Sun Summit and First American 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 First American 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 First American Silver, you can compare the effects of market volatilities on Sun Summit and First American 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 First American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Summit and First American.
Diversification Opportunities for Sun Summit and First American
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sun and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sun Summit Minerals and First American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First American Silver 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 First American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First American Silver has no effect on the direction of Sun Summit i.e., Sun Summit and First American go up and down completely randomly.
Pair Corralation between Sun Summit and First American
Assuming the 90 days horizon Sun Summit is expected to generate 1.94 times less return on investment than First American. But when comparing it to its historical volatility, Sun Summit Minerals is 2.72 times less risky than First American. It trades about 0.06 of its potential returns per unit of risk. First American Silver is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.07 in First American Silver on September 1, 2024 and sell it today you would lose (0.06) from holding First American Silver or give up 85.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 86.4% |
| Values | Daily Returns |
Sun Summit Minerals vs. First American Silver
Performance |
| Timeline |
| Sun Summit Minerals |
| First American Silver |
Sun Summit and First American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Summit and First American
The main advantage of trading using opposite Sun Summit and First American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Summit position performs unexpectedly, First American 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 First American will offset losses from the drop in First American's long position.| Sun Summit vs. South32 Limited | Sun Summit vs. NioCorp Developments Ltd | Sun Summit vs. HUMANA INC | Sun Summit vs. SCOR PK |
| First American vs. Australian Vanadium Limited | First American vs. International Lithium Corp | First American vs. Wealth Minerals | First American vs. Decade Resources |
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.
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