Correlation Between Summa Silver and New Pacific
Can any of the company-specific risk be diversified away by investing in both Summa Silver and New Pacific 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 New Pacific 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 New Pacific Metals, you can compare the effects of market volatilities on Summa Silver and New Pacific 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 New Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and New Pacific.
Diversification Opportunities for Summa Silver and New Pacific
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Summa and New is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and New Pacific Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Pacific Metals 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 New Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Pacific Metals has no effect on the direction of Summa Silver i.e., Summa Silver and New Pacific go up and down completely randomly.
Pair Corralation between Summa Silver and New Pacific
Assuming the 90 days horizon Summa Silver is expected to generate 4.34 times less return on investment than New Pacific. But when comparing it to its historical volatility, Summa Silver Corp is 1.04 times less risky than New Pacific. It trades about 0.02 of its potential returns per unit of risk. New Pacific Metals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 147.00 in New Pacific Metals on September 14, 2024 and sell it today you would earn a total of 5.00 from holding New Pacific Metals or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summa Silver Corp vs. New Pacific Metals
Performance |
| Timeline |
| Summa Silver Corp |
| New Pacific Metals |
Summa Silver and New Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summa Silver and New Pacific
The main advantage of trading using opposite Summa Silver and New Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summa Silver position performs unexpectedly, New Pacific 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 New Pacific will offset losses from the drop in New Pacific's long position.| Summa Silver vs. P2 Gold | Summa Silver vs. Enduro Metals | Summa Silver vs. Kodiak Copper Corp | Summa Silver vs. Mirasol Resources |
| New Pacific vs. Endeavour Silver Corp | New Pacific vs. Metalla Royalty Streaming | New Pacific vs. Hecla Mining | New Pacific vs. Gatos Silver |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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