Correlation Between Summa Silver and Ecovyst

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

Diversification Opportunities for Summa Silver and Ecovyst

0.5

Correlation Coefficient

Summa Silver  Ecovyst

Very weak diversification

The 3 months correlation between Summa and Ecovyst is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst 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 Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of Summa Silver i.e., Summa Silver and Ecovyst go up and down completely randomly.

Pair Corralation between Summa Silver and Ecovyst

Assuming the 90 days horizon Summa Silver Corp is expected to generate 3.17 times more return on investment than Ecovyst. However, Summa Silver is 3.17 times more volatile than Ecovyst. It trades about 0.02 of its potential returns per unit of risk. Ecovyst is currently generating about -0.35 per unit of risk. If you would invest  31.00  in Summa Silver Corp on February 1, 2024 and sell it today you would earn a total of  0.00  from holding Summa Silver Corp or generate 0.0% 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.  Ecovyst

Summa Silver Corp

Risk-Adjusted Performance

5 of 100

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. Despite nearly fragile basic indicators, Summa Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Ecovyst

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ecovyst are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ecovyst is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Summa Silver and Ecovyst

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

The idea behind Summa Silver Corp and Ecovyst 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.