Correlation Between Sun Peak and Precious Metals

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

Diversification Opportunities for Sun Peak and Precious Metals

-0.04

Correlation Coefficient

Sun Peak  Precious Metals

Good diversification

The 3 months correlation between Sun and Precious is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sun Peak Metals and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And 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 Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Sun Peak i.e., Sun Peak and Precious Metals go up and down completely randomly.

Pair Corralation between Sun Peak and Precious Metals

Assuming the 90 days trading horizon Sun Peak is expected to generate 1.61 times less return on investment than Precious Metals. In addition to that, Sun Peak is 3.38 times more volatile than Precious Metals And. It trades about 0.04 of its total potential returns per unit of risk. Precious Metals And is currently generating about 0.19 per unit of volatility. If you would invest  176.00  in Precious Metals And on December 22, 2024 and sell it today you would earn a total of  34.00  from holding Precious Metals And or generate 19.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sun Peak Metals  vs.  Precious Metals And

Sun Peak Metals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Peak Metals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sun Peak may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Precious Metals And

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Precious Metals And are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Precious Metals sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sun Peak and Precious Metals

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

The idea behind Sun Peak Metals and Precious Metals And 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.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.