Correlation Between Summa Silver and Old Dominion
Can any of the company-specific risk be diversified away by investing in both Summa Silver and Old Dominion 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 Old Dominion 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 Old Dominion Freight, you can compare the effects of market volatilities on Summa Silver and Old Dominion 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 Old Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and Old Dominion.
Diversification Opportunities for Summa Silver and Old Dominion
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summa and Old is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and Old Dominion Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Dominion Freight 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 Old Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Dominion Freight has no effect on the direction of Summa Silver i.e., Summa Silver and Old Dominion go up and down completely randomly.
Pair Corralation between Summa Silver and Old Dominion
Assuming the 90 days horizon Summa Silver Corp is expected to under-perform the Old Dominion. In addition to that, Summa Silver is 2.31 times more volatile than Old Dominion Freight. It trades about -0.04 of its total potential returns per unit of risk. Old Dominion Freight is currently generating about 0.05 per unit of volatility. If you would invest 18,674 in Old Dominion Freight on September 2, 2024 and sell it today you would earn a total of 3,840 from holding Old Dominion Freight or generate 20.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summa Silver Corp vs. Old Dominion Freight
Performance |
| Timeline |
| Summa Silver Corp |
| Old Dominion Freight |
Summa Silver and Old Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summa Silver and Old Dominion
The main advantage of trading using opposite Summa Silver and Old Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summa Silver position performs unexpectedly, Old Dominion 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 Old Dominion will offset losses from the drop in Old Dominion's long position.| Summa Silver vs. HUMANA INC | Summa Silver vs. SCOR PK | Summa Silver vs. Aquagold International | Summa Silver vs. Thrivent High Yield |
| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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