Correlation Between Aflac Incorporated and Summa Silver

Can any of the company-specific risk be diversified away by investing in both Aflac Incorporated and Summa Silver 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 Aflac Incorporated and Summa Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aflac Incorporated and Summa Silver Corp, you can compare the effects of market volatilities on Aflac Incorporated and Summa Silver 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 Aflac Incorporated with a short position of Summa Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aflac Incorporated and Summa Silver.

Diversification Opportunities for Aflac Incorporated and Summa Silver

0.19

Correlation Coefficient

Aflac Incorporated  Summa Silver

Average diversification

The 3 months correlation between Aflac and Summa is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aflac Incorporated and Summa Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summa Silver Corp and Aflac Incorporated 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 Aflac Incorporated are associated (or correlated) with Summa Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summa Silver Corp has no effect on the direction of Aflac Incorporated i.e., Aflac Incorporated and Summa Silver go up and down completely randomly.

Pair Corralation between Aflac Incorporated and Summa Silver

Considering the 90-day investment horizon Aflac Incorporated is expected to generate 0.26 times more return on investment than Summa Silver. However, Aflac Incorporated is 3.85 times less risky than Summa Silver. It trades about 0.08 of its potential returns per unit of risk. Summa Silver Corp is currently generating about 0.0 per unit of risk. If you would invest  6,625  in Aflac Incorporated on February 28, 2024 and sell it today you would earn a total of  2,144  from holding Aflac Incorporated or generate 32.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.36%
Values	Daily Returns

Aflac Incorporated  vs.  Summa Silver Corp

Aflac Incorporated

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aflac Incorporated are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, Aflac Incorporated may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Summa Silver Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Summa Silver Corp are ranked lower than 8 (%) 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.

Pair Trading with Aflac Incorporated and Summa Silver

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

The idea behind Aflac Incorporated and Summa Silver Corp 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.