Correlation Between Sun Summit and Group Eleven
Can any of the company-specific risk be diversified away by investing in both Sun Summit and Group Eleven 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 Group Eleven 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 Group Eleven Resources, you can compare the effects of market volatilities on Sun Summit and Group Eleven 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 Group Eleven. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Summit and Group Eleven.
Diversification Opportunities for Sun Summit and Group Eleven
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sun and Group is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sun Summit Minerals and Group Eleven Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Eleven Resources 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 Group Eleven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Eleven Resources has no effect on the direction of Sun Summit i.e., Sun Summit and Group Eleven go up and down completely randomly.
Pair Corralation between Sun Summit and Group Eleven
Assuming the 90 days horizon Sun Summit Minerals is expected to under-perform the Group Eleven. In addition to that, Sun Summit is 1.4 times more volatile than Group Eleven Resources. It trades about -0.02 of its total potential returns per unit of risk. Group Eleven Resources is currently generating about 0.04 per unit of volatility. If you would invest 12.00 in Group Eleven Resources on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Group Eleven Resources or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Sun Summit Minerals vs. Group Eleven Resources
Performance |
| Timeline |
| Sun Summit Minerals |
| Group Eleven Resources |
Sun Summit and Group Eleven Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Summit and Group Eleven
The main advantage of trading using opposite Sun Summit and Group Eleven positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Summit position performs unexpectedly, Group Eleven 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 Group Eleven will offset losses from the drop in Group Eleven's long position.| Sun Summit vs. South32 Limited | Sun Summit vs. NioCorp Developments Ltd | Sun Summit vs. HUMANA INC | Sun Summit vs. SCOR PK |
| Group Eleven vs. Tinka Resources Limited | Group Eleven vs. Neo Battery Materials | Group Eleven vs. United States Antimony | Group Eleven vs. NioCorp Developments Ltd |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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