Correlation Between Sun Summit and Pegasus Resources
Can any of the company-specific risk be diversified away by investing in both Sun Summit and Pegasus Resources 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 Pegasus Resources 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 Pegasus Resources, you can compare the effects of market volatilities on Sun Summit and Pegasus Resources 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 Pegasus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Summit and Pegasus Resources.
Diversification Opportunities for Sun Summit and Pegasus Resources
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sun and Pegasus is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sun Summit Minerals and Pegasus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus 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 Pegasus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Resources has no effect on the direction of Sun Summit i.e., Sun Summit and Pegasus Resources go up and down completely randomly.
Pair Corralation between Sun Summit and Pegasus Resources
Assuming the 90 days horizon Sun Summit Minerals is expected to under-perform the Pegasus Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Sun Summit Minerals is 3.41 times less risky than Pegasus Resources. The otc stock trades about -0.32 of its potential returns per unit of risk. The Pegasus Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Pegasus Resources on September 1, 2024 and sell it today you would lose (3.00) from holding Pegasus Resources or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sun Summit Minerals vs. Pegasus Resources
Performance |
| Timeline |
| Sun Summit Minerals |
| Pegasus Resources |
Sun Summit and Pegasus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Summit and Pegasus Resources
The main advantage of trading using opposite Sun Summit and Pegasus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Summit position performs unexpectedly, Pegasus Resources 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 Pegasus Resources will offset losses from the drop in Pegasus Resources' long position.| Sun Summit vs. South32 Limited | Sun Summit vs. NioCorp Developments Ltd | Sun Summit vs. HUMANA INC | Sun Summit vs. SCOR PK |
| Pegasus Resources vs. ATT Inc | Pegasus Resources vs. Merck Company | Pegasus Resources vs. Walt Disney | Pegasus Resources vs. Caterpillar |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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