Correlation Between Sun Peak and Ramp Metals

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

Diversification Opportunities for Sun Peak and Ramp Metals

-0.03

Correlation Coefficient

Sun Peak  Ramp Metals

Good diversification

The 3 months correlation between Sun and Ramp is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sun Peak Metals and Ramp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramp Metals 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 Ramp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramp Metals has no effect on the direction of Sun Peak i.e., Sun Peak and Ramp Metals go up and down completely randomly.

Pair Corralation between Sun Peak and Ramp Metals

Assuming the 90 days trading horizon Sun Peak Metals is expected to under-perform the Ramp Metals. In addition to that, Sun Peak is 1.18 times more volatile than Ramp Metals. It trades about -0.04 of its total potential returns per unit of risk. Ramp Metals is currently generating about 0.27 per unit of volatility. If you would invest  76.00  in Ramp Metals on October 11, 2024 and sell it today you would earn a total of  18.00  from holding Ramp Metals or generate 23.68% 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.  Ramp Metals

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 unfluctuating 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.

Ramp Metals

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ramp Metals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal primary indicators, Ramp Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sun Peak and Ramp Metals

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

The idea behind Sun Peak Metals and Ramp Metals 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.