Correlation Between Summa Silver and Atrium Mortgage

Can any of the company-specific risk be diversified away by investing in both Summa Silver and Atrium Mortgage 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 Summa Silver and Atrium Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Summa Silver Corp and Atrium Mortgage Investment, you can compare the effects of market volatilities on Summa Silver and Atrium Mortgage 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 Summa Silver with a short position of Atrium Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and Atrium Mortgage.

Diversification Opportunities for Summa Silver and Atrium Mortgage

-0.2

Correlation Coefficient

Summa Silver  Atrium Mortgage

Good diversification

The 3 months correlation between Summa and Atrium is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and Atrium Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Mortgage Inve and Summa Silver 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 Summa Silver Corp are associated (or correlated) with Atrium Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrium Mortgage Inve has no effect on the direction of Summa Silver i.e., Summa Silver and Atrium Mortgage go up and down completely randomly.

Pair Corralation between Summa Silver and Atrium Mortgage

Assuming the 90 days trading horizon Summa Silver Corp is expected to generate 4.74 times more return on investment than Atrium Mortgage. However, Summa Silver is 4.74 times more volatile than Atrium Mortgage Investment. It trades about 0.12 of its potential returns per unit of risk. Atrium Mortgage Investment is currently generating about 0.01 per unit of risk. If you would invest  28.00  in Summa Silver Corp on December 21, 2024 and sell it today you would earn a total of  9.00  from holding Summa Silver Corp or generate 32.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Summa Silver Corp  vs.  Atrium Mortgage Investment

Summa Silver Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Summa Silver Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Summa Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Atrium Mortgage Inve

Risk-Adjusted Performance

Weak

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

Pair Trading with Summa Silver and Atrium Mortgage

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

The idea behind Summa Silver Corp and Atrium Mortgage Investment 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.