Correlation Between Sun Summit and Sherritt International
Can any of the company-specific risk be diversified away by investing in both Sun Summit and Sherritt International 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 Sherritt International 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 Sherritt International, you can compare the effects of market volatilities on Sun Summit and Sherritt International 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 Sherritt International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Summit and Sherritt International.
Diversification Opportunities for Sun Summit and Sherritt International
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sun and Sherritt is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sun Summit Minerals and Sherritt International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherritt International 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 Sherritt International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherritt International has no effect on the direction of Sun Summit i.e., Sun Summit and Sherritt International go up and down completely randomly.
Pair Corralation between Sun Summit and Sherritt International
Assuming the 90 days horizon Sun Summit Minerals is expected to under-perform the Sherritt International. But the otc stock apears to be less risky and, when comparing its historical volatility, Sun Summit Minerals is 1.3 times less risky than Sherritt International. The otc stock trades about -0.02 of its potential returns per unit of risk. The Sherritt International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Sherritt International on September 1, 2024 and sell it today you would lose (11.00) from holding Sherritt International or give up 47.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Summit Minerals vs. Sherritt International
Performance |
| Timeline |
| Sun Summit Minerals |
| Sherritt International |
Sun Summit and Sherritt International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Summit and Sherritt International
The main advantage of trading using opposite Sun Summit and Sherritt International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Summit position performs unexpectedly, Sherritt International 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 Sherritt International will offset losses from the drop in Sherritt International's long position.| Sun Summit vs. South32 Limited | Sun Summit vs. NioCorp Developments Ltd | Sun Summit vs. HUMANA INC | Sun Summit vs. SCOR PK |
| Sherritt International vs. South32 Limited | Sherritt International vs. NioCorp Developments Ltd | Sherritt International vs. HUMANA INC | Sherritt International vs. SCOR PK |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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