Correlation Between Sun Summit and Tinka Resources
Can any of the company-specific risk be diversified away by investing in both Sun Summit and Tinka 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 Tinka 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 Tinka Resources Limited, you can compare the effects of market volatilities on Sun Summit and Tinka 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 Tinka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Summit and Tinka Resources.
Diversification Opportunities for Sun Summit and Tinka Resources
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sun and Tinka is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sun Summit Minerals and Tinka Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tinka 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 Tinka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tinka Resources has no effect on the direction of Sun Summit i.e., Sun Summit and Tinka Resources go up and down completely randomly.
Pair Corralation between Sun Summit and Tinka Resources
Assuming the 90 days horizon Sun Summit Minerals is expected to under-perform the Tinka Resources. In addition to that, Sun Summit is 1.51 times more volatile than Tinka Resources Limited. It trades about -0.02 of its total potential returns per unit of risk. Tinka Resources Limited is currently generating about -0.02 per unit of volatility. If you would invest 10.00 in Tinka Resources Limited on September 1, 2024 and sell it today you would lose (3.00) from holding Tinka Resources Limited or give up 30.0% 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. Tinka Resources Limited
Performance |
| Timeline |
| Sun Summit Minerals |
| Tinka Resources |
Sun Summit and Tinka Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Summit and Tinka Resources
The main advantage of trading using opposite Sun Summit and Tinka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Summit position performs unexpectedly, Tinka 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 Tinka Resources will offset losses from the drop in Tinka Resources' long position.| Sun Summit vs. South32 Limited | Sun Summit vs. NioCorp Developments Ltd | Sun Summit vs. HUMANA INC | Sun Summit vs. SCOR PK |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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