Correlation Between Summa Silver Corp and Helios Fairfax

Can any of the company-specific risk be diversified away by investing in both Summa Silver Corp and Helios Fairfax 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 Corp and Helios Fairfax 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 Helios Fairfax Partners, you can compare the effects of market volatilities on Summa Silver Corp and Helios Fairfax 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 Corp with a short position of Helios Fairfax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver Corp and Helios Fairfax.

Diversification Opportunities for Summa Silver Corp and Helios Fairfax

-0.39

Correlation Coefficient

Summa Silver Corp  Helios Fairfax

Very good diversification

The 3 months correlation between Summa and Helios is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and Helios Fairfax Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Fairfax Partners and Summa Silver Corp 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 Helios Fairfax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Fairfax Partners has no effect on the direction of Summa Silver Corp i.e., Summa Silver Corp and Helios Fairfax go up and down completely randomly.

Pair Corralation between Summa Silver Corp and Helios Fairfax

Assuming the 90 days trading horizon Summa Silver Corp is expected to generate 1.05 times more return on investment than Helios Fairfax. However, Summa Silver Corp is 1.05 times more volatile than Helios Fairfax Partners. It trades about 0.11 of its potential returns per unit of risk. Helios Fairfax Partners is currently generating about -0.03 per unit of risk. If you would invest  28.00  in Summa Silver Corp on December 23, 2024 and sell it today you would earn a total of  8.00  from holding Summa Silver Corp or generate 28.57% return on investment over 90 days.

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

Summa Silver Corp  vs.  Helios Fairfax Partners

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 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Summa Silver Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Helios Fairfax Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Helios Fairfax Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Summa Silver Corp and Helios Fairfax

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

The idea behind Summa Silver Corp and Helios Fairfax Partners 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.