Correlation Between Summit Materials and Empire Metals
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Empire Metals 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 Summit Materials and Empire Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials Cl and Empire Metals Limited, you can compare the effects of market volatilities on Summit Materials and Empire Metals 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 Summit Materials with a short position of Empire Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Empire Metals.
Diversification Opportunities for Summit Materials and Empire Metals
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and Empire is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials Cl and Empire Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire Metals Limited and Summit Materials 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 Summit Materials Cl are associated (or correlated) with Empire Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire Metals Limited has no effect on the direction of Summit Materials i.e., Summit Materials and Empire Metals go up and down completely randomly.
Pair Corralation between Summit Materials and Empire Metals
Assuming the 90 days trading horizon Summit Materials is expected to generate 2.97 times less return on investment than Empire Metals. But when comparing it to its historical volatility, Summit Materials Cl is 2.59 times less risky than Empire Metals. It trades about 0.06 of its potential returns per unit of risk. Empire Metals Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Empire Metals Limited on September 20, 2024 and sell it today you would earn a total of 460.00 from holding Empire Metals Limited or generate 278.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.58% |
| Values | Daily Returns |
Summit Materials Cl vs. Empire Metals Limited
Performance |
| Timeline |
| Summit Materials |
| Empire Metals Limited |
Summit Materials and Empire Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Empire Metals
The main advantage of trading using opposite Summit Materials and Empire Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Empire Metals 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 Empire Metals will offset losses from the drop in Empire Metals' long position.| Summit Materials vs. Samsung Electronics Co | Summit Materials vs. Samsung Electronics Co | Summit Materials vs. Hyundai Motor | Summit Materials vs. Reliance Industries Ltd |
| Empire Metals vs. Givaudan SA | Empire Metals vs. Antofagasta PLC | Empire Metals vs. Ferrexpo PLC | Empire Metals vs. Atalaya Mining |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stocks Directory Find actively traded stocks across global markets |