Correlation Between Summa Silver and Aris Mining

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

Diversification Opportunities for Summa Silver and Aris Mining

0.68

Correlation Coefficient

Summa Silver  Aris Mining

Poor diversification

The 3 months correlation between Summa and Aris is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and Aris Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aris Mining 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 Aris Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aris Mining has no effect on the direction of Summa Silver i.e., Summa Silver and Aris Mining go up and down completely randomly.

Pair Corralation between Summa Silver and Aris Mining

Assuming the 90 days trading horizon Summa Silver Corp is expected to generate 1.77 times more return on investment than Aris Mining. However, Summa Silver is 1.77 times more volatile than Aris Mining. It trades about 0.19 of its potential returns per unit of risk. Aris Mining is currently generating about 0.18 per unit of risk. If you would invest  28.00  in Summa Silver Corp on April 24, 2025 and sell it today you would earn a total of  19.00  from holding Summa Silver Corp or generate 67.86% return on investment over 90 days.

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

Summa Silver Corp  vs.  Aris Mining

Summa Silver Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Summa Silver Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Summa Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Aris Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aris Mining are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Aris Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Summa Silver and Aris Mining

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

The idea behind Summa Silver Corp and Aris Mining 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.