Correlation Between Sun Peak and Canaf Investments

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

By analyzing existing cross correlation between Sun Peak Metals and Canaf Investments, you can compare the effects of market volatilities on Sun Peak and Canaf Investments 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 Peak with a short position of Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Peak and Canaf Investments.

Diversification Opportunities for Sun Peak and Canaf Investments

0.31

Correlation Coefficient

Sun Peak  Canaf Investments

Weak diversification

The 3 months correlation between Sun and Canaf is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sun Peak Metals and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and Sun Peak 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 Peak Metals are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Sun Peak i.e., Sun Peak and Canaf Investments go up and down completely randomly.

Pair Corralation between Sun Peak and Canaf Investments

Assuming the 90 days trading horizon Sun Peak Metals is expected to under-perform the Canaf Investments. In addition to that, Sun Peak is 1.21 times more volatile than Canaf Investments. It trades about -0.04 of its total potential returns per unit of risk. Canaf Investments is currently generating about 0.02 per unit of volatility. If you would invest  32.00  in Canaf Investments on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Canaf Investments or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sun Peak Metals  vs.  Canaf Investments

Sun Peak Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sun Peak Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Canaf Investments

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canaf Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Canaf Investments is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Sun Peak and Canaf Investments

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

The idea behind Sun Peak Metals and Canaf Investments 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.