Correlation Between Sun Summit and Polymet Mining

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

Diversification Opportunities for Sun Summit and Polymet Mining

0.0

Correlation Coefficient

Sun Summit  Polymet Mining

Pay attention - limited upside

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

Pair Corralation between Sun Summit and Polymet Mining

If you would invest  7.71  in Sun Summit Minerals on December 27, 2024 and sell it today you would lose (1.22) from holding Sun Summit Minerals or give up 15.82% of portfolio value over 90 days.

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

Sun Summit Minerals  vs.  Polymet Mining Corp

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 nearly stable technical and fundamental indicators, Sun Summit is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with Sun Summit and Polymet Mining

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

The idea behind Sun Summit Minerals and Polymet Mining Corp 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.