Correlation Between Summa Silver Corp and Cobalt Power

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

Diversification Opportunities for Summa Silver Corp and Cobalt Power

0.15

Correlation Coefficient

Summa Silver Corp  Cobalt Power

Average diversification

The 3 months correlation between Summa and Cobalt is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and Cobalt Power Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cobalt Power Group 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 Cobalt Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cobalt Power Group has no effect on the direction of Summa Silver Corp i.e., Summa Silver Corp and Cobalt Power go up and down completely randomly.

Pair Corralation between Summa Silver Corp and Cobalt Power

Assuming the 90 days trading horizon Summa Silver Corp is expected to generate 1.01 times more return on investment than Cobalt Power. However, Summa Silver Corp is 1.01 times more volatile than Cobalt Power Group. It trades about 0.11 of its potential returns per unit of risk. Cobalt Power Group is currently generating about 0.02 per unit of risk. If you would invest  28.00  in Summa Silver Corp on December 22, 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Summa Silver Corp  vs.  Cobalt Power Group

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.

Cobalt Power Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cobalt Power Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Cobalt Power may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Summa Silver Corp and Cobalt Power

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

The idea behind Summa Silver Corp and Cobalt Power Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.