Correlation Between Sun Summit and Euro Manganese
Can any of the company-specific risk be diversified away by investing in both Sun Summit and Euro Manganese 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 Euro Manganese 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 Euro Manganese, you can compare the effects of market volatilities on Sun Summit and Euro Manganese 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 Euro Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Summit and Euro Manganese.
Diversification Opportunities for Sun Summit and Euro Manganese
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sun and Euro is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sun Summit Minerals and Euro Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Manganese 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 Euro Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Manganese has no effect on the direction of Sun Summit i.e., Sun Summit and Euro Manganese go up and down completely randomly.
Pair Corralation between Sun Summit and Euro Manganese
Assuming the 90 days horizon Sun Summit Minerals is expected to under-perform the Euro Manganese. In addition to that, Sun Summit is 1.73 times more volatile than Euro Manganese. It trades about -0.32 of its total potential returns per unit of risk. Euro Manganese is currently generating about -0.4 per unit of volatility. If you would invest 5.00 in Euro Manganese on September 1, 2024 and sell it today you would lose (2.10) from holding Euro Manganese or give up 42.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Summit Minerals vs. Euro Manganese
Performance |
| Timeline |
| Sun Summit Minerals |
| Euro Manganese |
Sun Summit and Euro Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Summit and Euro Manganese
The main advantage of trading using opposite Sun Summit and Euro Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Summit position performs unexpectedly, Euro Manganese 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 Euro Manganese will offset losses from the drop in Euro Manganese's long position.| Sun Summit vs. South32 Limited | Sun Summit vs. NioCorp Developments Ltd | Sun Summit vs. HUMANA INC | Sun Summit vs. SCOR PK |
| Euro Manganese vs. Bravada Gold | Euro Manganese vs. Silver Spruce Resources | Euro Manganese vs. Monitor Ventures | Euro Manganese vs. Pershing 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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