Correlation Between Zacapa Resources and Sun Summit

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

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

Diversification Opportunities for Zacapa Resources and Sun Summit

0.0

Correlation Coefficient

Zacapa Resources  Sun Summit

Pay attention - limited upside

The 3 months correlation between Zacapa and Sun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zacapa Resources 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 Zacapa Resources 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 Zacapa Resources 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 Zacapa Resources i.e., Zacapa Resources and Sun Summit go up and down completely randomly.

Pair Corralation between Zacapa Resources and Sun Summit

If you would invest  7.30  in Sun Summit Minerals on December 28, 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	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Zacapa Resources  vs.  Sun Summit Minerals

Zacapa Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zacapa Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Zacapa Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the 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 Zacapa Resources and Sun Summit

The main advantage of trading using opposite Zacapa Resources and Sun Summit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zacapa Resources 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 Zacapa Resources 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.