Correlation Between Voltage Metals and Sun Summit

Can any of the company-specific risk be diversified away by investing in both Voltage Metals and Sun Summit 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 Voltage Metals and Sun Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voltage Metals Corp and Sun Summit Minerals, you can compare the effects of market volatilities on Voltage Metals and Sun Summit 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 Voltage Metals with a short position of Sun Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voltage Metals and Sun Summit.

Diversification Opportunities for Voltage Metals and Sun Summit

-0.09

Correlation Coefficient

Voltage Metals  Sun Summit

Good diversification

The 3 months correlation between Voltage and Sun is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Voltage Metals Corp and Sun Summit Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Summit Minerals and Voltage Metals 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 Voltage Metals Corp are associated (or correlated) with Sun Summit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Summit Minerals has no effect on the direction of Voltage Metals i.e., Voltage Metals and Sun Summit go up and down completely randomly.

Pair Corralation between Voltage Metals and Sun Summit

Assuming the 90 days horizon Voltage Metals Corp is expected to under-perform the Sun Summit. In addition to that, Voltage Metals is 1.31 times more volatile than Sun Summit Minerals. It trades about -0.18 of its total potential returns per unit of risk. Sun Summit Minerals is currently generating about 0.01 per unit of volatility. If you would invest  7.30  in Sun Summit Minerals on December 29, 2024 and sell it today you would lose (0.80) from holding Sun Summit Minerals or give up 10.96% of portfolio value over 90 days.

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

Voltage Metals Corp  vs.  Sun Summit Minerals

Voltage Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voltage Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sun Summit Minerals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Summit Minerals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Sun Summit may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Voltage Metals and Sun Summit

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

The idea behind Voltage Metals Corp and Sun Summit Minerals 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.