Correlation Between Sun Summit and Pampa Metals
Can any of the company-specific risk be diversified away by investing in both Sun Summit and Pampa 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 Pampa 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 Pampa Metals, you can compare the effects of market volatilities on Sun Summit and Pampa 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 Pampa Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Summit and Pampa Metals.
Diversification Opportunities for Sun Summit and Pampa Metals
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Pampa is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sun Summit Minerals and Pampa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Metals 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 Pampa Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Metals has no effect on the direction of Sun Summit i.e., Sun Summit and Pampa Metals go up and down completely randomly.
Pair Corralation between Sun Summit and Pampa Metals
Assuming the 90 days horizon Sun Summit is expected to generate 3.05 times less return on investment than Pampa Metals. But when comparing it to its historical volatility, Sun Summit Minerals is 2.91 times less risky than Pampa Metals. It trades about 0.06 of its potential returns per unit of risk. Pampa Metals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 44.00 in Pampa Metals on August 28, 2024 and sell it today you would lose (29.00) from holding Pampa Metals or give up 65.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.16% |
| Values | Daily Returns |
Sun Summit Minerals vs. Pampa Metals
Performance |
| Timeline |
| Sun Summit Minerals |
| Pampa Metals |
Sun Summit and Pampa Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Summit and Pampa Metals
The main advantage of trading using opposite Sun Summit and Pampa Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Summit position performs unexpectedly, Pampa 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 Pampa Metals will offset losses from the drop in Pampa Metals' long position.| Sun Summit vs. Ascendant Resources | Sun Summit vs. Cantex Mine Development | Sun Summit vs. Amarc Resources | Sun Summit vs. Sterling Metals Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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