Correlation Between Sun Peak and Orbit Garant

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

Diversification Opportunities for Sun Peak and Orbit Garant

0.2

Correlation Coefficient

Sun Peak  Orbit Garant

Modest diversification

The 3 months correlation between Sun and Orbit is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sun Peak Metals and Orbit Garant Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Garant Drilling 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 Orbit Garant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Garant Drilling has no effect on the direction of Sun Peak i.e., Sun Peak and Orbit Garant go up and down completely randomly.

Pair Corralation between Sun Peak and Orbit Garant

Assuming the 90 days trading horizon Sun Peak Metals is expected to under-perform the Orbit Garant. In addition to that, Sun Peak is 1.29 times more volatile than Orbit Garant Drilling. It trades about -0.02 of its total potential returns per unit of risk. Orbit Garant Drilling is currently generating about 0.17 per unit of volatility. If you would invest  78.00  in Orbit Garant Drilling on December 19, 2024 and sell it today you would earn a total of  34.00  from holding Orbit Garant Drilling or generate 43.59% 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.  Orbit Garant Drilling

Sun Peak Metals

Risk-Adjusted Performance

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 unfluctuating 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.

Orbit Garant Drilling

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Garant Drilling are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Orbit Garant displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sun Peak and Orbit Garant

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

The idea behind Sun Peak Metals and Orbit Garant Drilling 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.