Correlation Between Summa Silver and INTEL CDR

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

Diversification Opportunities for Summa Silver and INTEL CDR

0.4

Correlation Coefficient

Summa Silver  INTEL CDR

Very weak diversification

The 3 months correlation between Summa and INTEL is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR 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 INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of Summa Silver i.e., Summa Silver and INTEL CDR go up and down completely randomly.

Pair Corralation between Summa Silver and INTEL CDR

Assuming the 90 days trading horizon Summa Silver Corp is expected to generate 1.31 times more return on investment than INTEL CDR. However, Summa Silver is 1.31 times more volatile than INTEL CDR. It trades about 0.07 of its potential returns per unit of risk. INTEL CDR is currently generating about 0.03 per unit of risk. If you would invest  28.00  in Summa Silver Corp on December 4, 2024 and sell it today you would earn a total of  4.00  from holding Summa Silver Corp or generate 14.29% return on investment over 90 days.

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

Summa Silver Corp  vs.  INTEL CDR

Summa Silver Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Summa Silver Corp are ranked lower than 5 (%) 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.

INTEL CDR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in INTEL CDR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, INTEL CDR may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Summa Silver and INTEL CDR

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

The idea behind Summa Silver Corp and INTEL CDR 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.