Correlation Between Summa Silver and Polymetal International
Can any of the company-specific risk be diversified away by investing in both Summa Silver and Polymetal 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 Summa Silver and Polymetal International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summa Silver Corp and Polymetal International PLC, you can compare the effects of market volatilities on Summa Silver and Polymetal 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 Summa Silver with a short position of Polymetal International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and Polymetal International.
Diversification Opportunities for Summa Silver and Polymetal International
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summa and Polymetal is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and Polymetal International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polymetal International and Summa Silver 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 Summa Silver Corp are associated (or correlated) with Polymetal International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polymetal International has no effect on the direction of Summa Silver i.e., Summa Silver and Polymetal International go up and down completely randomly.
Pair Corralation between Summa Silver and Polymetal International
Assuming the 90 days horizon Summa Silver Corp is expected to generate 0.75 times more return on investment than Polymetal International. However, Summa Silver Corp is 1.34 times less risky than Polymetal International. It trades about -0.02 of its potential returns per unit of risk. Polymetal International PLC is currently generating about -0.03 per unit of risk. If you would invest 54.00 in Summa Silver Corp on August 28, 2024 and sell it today you would lose (34.00) from holding Summa Silver Corp or give up 62.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.72% |
| Values | Daily Returns |
Summa Silver Corp vs. Polymetal International PLC
Performance |
| Timeline |
| Summa Silver Corp |
| Polymetal International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Summa Silver and Polymetal International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summa Silver and Polymetal International
The main advantage of trading using opposite Summa Silver and Polymetal International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summa Silver position performs unexpectedly, Polymetal 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 Polymetal International will offset losses from the drop in Polymetal International's long position.| Summa Silver vs. P2 Gold | Summa Silver vs. Enduro Metals | Summa Silver vs. Kodiak Copper Corp | Summa Silver vs. Mirasol Resources |
| Polymetal International vs. Fresnillo PLC | Polymetal International vs. Summa Silver Corp | Polymetal International vs. GoGold Resources | Polymetal International vs. Scottie Resources 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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