Correlation Between Summa Silver and Carters
Can any of the company-specific risk be diversified away by investing in both Summa Silver and Carters 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 Carters 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 Carters, you can compare the effects of market volatilities on Summa Silver and Carters 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 Carters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and Carters.
Diversification Opportunities for Summa Silver and Carters
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Summa and Carters is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters 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 Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of Summa Silver i.e., Summa Silver and Carters go up and down completely randomly.
Pair Corralation between Summa Silver and Carters
Assuming the 90 days horizon Summa Silver Corp is expected to under-perform the Carters. In addition to that, Summa Silver is 2.49 times more volatile than Carters. It trades about -0.02 of its total potential returns per unit of risk. Carters is currently generating about -0.01 per unit of volatility. If you would invest 6,819 in Carters on September 23, 2024 and sell it today you would lose (1,255) from holding Carters or give up 18.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Summa Silver Corp vs. Carters
Performance |
Timeline |
Summa Silver Corp |
Carters |
Summa Silver and Carters Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Summa Silver and Carters
The main advantage of trading using opposite Summa Silver and Carters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summa Silver position performs unexpectedly, Carters 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 Carters will offset losses from the drop in Carters' long position.Summa Silver vs. Impala Platinum Holdings | Summa Silver vs. Fresnillo PLC | Summa Silver vs. Compania de Minas | Summa Silver vs. Triple Flag Precious |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |