Correlation Between Sun Summit and Westwater Resources
Can any of the company-specific risk be diversified away by investing in both Sun Summit and Westwater 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 Westwater 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 Westwater Resources, you can compare the effects of market volatilities on Sun Summit and Westwater 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 Westwater Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Summit and Westwater Resources.
Diversification Opportunities for Sun Summit and Westwater Resources
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sun and Westwater is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sun Summit Minerals and Westwater Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwater 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 Westwater Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwater Resources has no effect on the direction of Sun Summit i.e., Sun Summit and Westwater Resources go up and down completely randomly.
Pair Corralation between Sun Summit and Westwater Resources
Assuming the 90 days horizon Sun Summit Minerals is expected to under-perform the Westwater Resources. In addition to that, Sun Summit is 2.26 times more volatile than Westwater Resources. It trades about -0.02 of its total potential returns per unit of risk. Westwater Resources is currently generating about 0.05 per unit of volatility. If you would invest 50.00 in Westwater Resources on August 29, 2024 and sell it today you would earn a total of 9.00 from holding Westwater Resources or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Summit Minerals vs. Westwater Resources
Performance |
| Timeline |
| Sun Summit Minerals |
| Westwater Resources |
Sun Summit and Westwater Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Summit and Westwater Resources
The main advantage of trading using opposite Sun Summit and Westwater Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Summit position performs unexpectedly, Westwater 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 Westwater Resources will offset losses from the drop in Westwater Resources' long position.| Sun Summit vs. Silver Hammer Mining | Sun Summit vs. Reyna Silver Corp | Sun Summit vs. Guanajuato Silver | Sun Summit vs. Silver One Resources |
| Westwater Resources vs. Mason Graphite | Westwater Resources vs. Northern Graphite | Westwater Resources vs. Graphite One | Westwater Resources vs. Lomiko Metals |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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