Correlation Between Sun Summit and Altius Minerals

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

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

Diversification Opportunities for Sun Summit and Altius Minerals

0.58

Correlation Coefficient

Sun Summit  Altius Minerals

Very weak diversification

The 3 months correlation between Sun and Altius is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sun Summit Minerals and Altius Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altius Minerals and Sun Summit 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 Summit Minerals are associated (or correlated) with Altius Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altius Minerals has no effect on the direction of Sun Summit i.e., Sun Summit and Altius Minerals go up and down completely randomly.

Pair Corralation between Sun Summit and Altius Minerals

Assuming the 90 days horizon Sun Summit Minerals is expected to generate 4.32 times more return on investment than Altius Minerals. However, Sun Summit is 4.32 times more volatile than Altius Minerals. It trades about 0.01 of its potential returns per unit of risk. Altius Minerals is currently generating about -0.03 per unit of risk. If you would invest  7.30  in Sun Summit Minerals on December 28, 2024 and sell it today you would lose (0.81) from holding Sun Summit Minerals or give up 11.1% of portfolio value over 90 days.

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

Sun Summit Minerals  vs.  Altius Minerals

Sun Summit Minerals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Summit Minerals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Sun Summit may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Altius Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altius Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Altius Minerals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sun Summit and Altius Minerals

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

The idea behind Sun Summit Minerals and Altius 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.