Correlation Between Sun Peak and Mundoro Capital

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

Diversification Opportunities for Sun Peak and Mundoro Capital

0.41

Correlation Coefficient

Sun Peak  Mundoro Capital

Very weak diversification

The 3 months correlation between Sun and Mundoro is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sun Peak Metals and Mundoro Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mundoro Capital 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 Mundoro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mundoro Capital has no effect on the direction of Sun Peak i.e., Sun Peak and Mundoro Capital go up and down completely randomly.

Pair Corralation between Sun Peak and Mundoro Capital

Assuming the 90 days trading horizon Sun Peak Metals is expected to generate 1.63 times more return on investment than Mundoro Capital. However, Sun Peak is 1.63 times more volatile than Mundoro Capital. It trades about 0.03 of its potential returns per unit of risk. Mundoro Capital is currently generating about 0.01 per unit of risk. If you would invest  30.00  in Sun Peak Metals on October 26, 2024 and sell it today you would lose (2.00) from holding Sun Peak Metals or give up 6.67% of portfolio value over 90 days.

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

Sun Peak Metals  vs.  Mundoro Capital

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 weak 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.

Mundoro Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mundoro Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Mundoro Capital 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 Mundoro Capital

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

The idea behind Sun Peak Metals and Mundoro Capital 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.