Correlation Between Polymet Mining and Sun Summit

Can any of the company-specific risk be diversified away by investing in both Polymet Mining and Sun Summit 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 Polymet Mining and Sun Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Polymet Mining Corp and Sun Summit Minerals, you can compare the effects of market volatilities on Polymet Mining and Sun Summit 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 Polymet Mining with a short position of Sun Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polymet Mining and Sun Summit.

Diversification Opportunities for Polymet Mining and Sun Summit

0.0

Correlation Coefficient

Polymet Mining  Sun Summit

Pay attention - limited upside

The 3 months correlation between Polymet and Sun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Polymet Mining Corp and Sun Summit Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Summit Minerals and Polymet Mining 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 Polymet Mining Corp are associated (or correlated) with Sun Summit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Summit Minerals has no effect on the direction of Polymet Mining i.e., Polymet Mining and Sun Summit go up and down completely randomly.

Pair Corralation between Polymet Mining and Sun Summit

If you would invest (100.00) in Polymet Mining Corp on December 3, 2024 and sell it today you would earn a total of  100.00  from holding Polymet Mining Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Polymet Mining Corp  vs.  Sun Summit Minerals

Polymet Mining Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polymet Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Polymet Mining is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Sun Summit Minerals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Summit Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Sun Summit reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Polymet Mining and Sun Summit

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

The idea behind Polymet Mining Corp and Sun Summit Minerals 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.