Correlation Between Sun Peak and Carebook Technologies

Can any of the company-specific risk be diversified away by investing in both Sun Peak and Carebook Technologies 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 Carebook Technologies 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 Carebook Technologies, you can compare the effects of market volatilities on Sun Peak and Carebook Technologies 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 Carebook Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Peak and Carebook Technologies.

Diversification Opportunities for Sun Peak and Carebook Technologies

0.24

Correlation Coefficient

Sun Peak  Carebook Technologies

Modest diversification

The 3 months correlation between Sun and Carebook is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sun Peak Metals and Carebook Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carebook Technologies 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 Carebook Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carebook Technologies has no effect on the direction of Sun Peak i.e., Sun Peak and Carebook Technologies go up and down completely randomly.

Pair Corralation between Sun Peak and Carebook Technologies

Assuming the 90 days trading horizon Sun Peak Metals is expected to under-perform the Carebook Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Sun Peak Metals is 3.1 times less risky than Carebook Technologies. The stock trades about 0.0 of its potential returns per unit of risk. The Carebook Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  7.50  in Carebook Technologies on October 24, 2024 and sell it today you would earn a total of  2.00  from holding Carebook Technologies or generate 26.67% 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.  Carebook Technologies

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Carebook Technologies

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carebook Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental drivers, Carebook Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sun Peak and Carebook Technologies

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

The idea behind Sun Peak Metals and Carebook Technologies 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..