Correlation Between EMX Royalty and Sun Summit

Can any of the company-specific risk be diversified away by investing in both EMX Royalty and Sun Summit 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 EMX Royalty and Sun Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EMX Royalty Corp and Sun Summit Minerals, you can compare the effects of market volatilities on EMX Royalty and Sun Summit 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 EMX Royalty with a short position of Sun Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMX Royalty and Sun Summit.

Diversification Opportunities for EMX Royalty and Sun Summit

-0.13

Correlation Coefficient

EMX Royalty  Sun Summit

Good diversification

The 3 months correlation between EMX and Sun is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding EMX Royalty Corp and Sun Summit Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Summit Minerals and EMX Royalty 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 EMX Royalty Corp are associated (or correlated) with Sun Summit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Summit Minerals has no effect on the direction of EMX Royalty i.e., EMX Royalty and Sun Summit go up and down completely randomly.

Pair Corralation between EMX Royalty and Sun Summit

Considering the 90-day investment horizon EMX Royalty Corp is expected to generate 0.22 times more return on investment than Sun Summit. However, EMX Royalty Corp is 4.59 times less risky than Sun Summit. It trades about 0.15 of its potential returns per unit of risk. Sun Summit Minerals is currently generating about -0.02 per unit of risk. If you would invest  177.00  in EMX Royalty Corp on December 26, 2024 and sell it today you would earn a total of  30.00  from holding EMX Royalty Corp or generate 16.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

EMX Royalty Corp  vs.  Sun Summit Minerals

EMX Royalty Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EMX Royalty Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, EMX Royalty showed solid returns over the last few months and may actually be approaching a breakup point.

Sun Summit Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Summit Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with EMX Royalty and Sun Summit

The main advantage of trading using opposite EMX Royalty and Sun Summit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMX Royalty position performs unexpectedly, Sun Summit 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 Sun Summit will offset losses from the drop in Sun Summit's long position.

The idea behind EMX Royalty Corp and Sun Summit Minerals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.