Correlation Between Sun Summit and TD Holdings

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

Diversification Opportunities for Sun Summit and TD Holdings

0.0

Correlation Coefficient

Sun Summit  TD Holdings

Pay attention - limited upside

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

Pair Corralation between Sun Summit and TD Holdings

If you would invest (100.00) in TD Holdings on December 26, 2024 and sell it today you would earn a total of  100.00  from holding TD Holdings 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

Sun Summit Minerals  vs.  TD Holdings

Sun Summit Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Summit Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

TD Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days TD Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, TD Holdings 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 TD Holdings

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

The idea behind Sun Summit Minerals and TD Holdings 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.