Correlation Between Summit Materials and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both Summit Materials and JLEN Environmental 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 JLEN Environmental 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 JLEN Environmental Assets, you can compare the effects of market volatilities on Summit Materials and JLEN Environmental 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 JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and JLEN Environmental.
Diversification Opportunities for Summit Materials and JLEN Environmental
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and JLEN is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials Cl and JLEN Environmental Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLEN Environmental Assets 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 JLEN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLEN Environmental Assets has no effect on the direction of Summit Materials i.e., Summit Materials and JLEN Environmental go up and down completely randomly.
Pair Corralation between Summit Materials and JLEN Environmental
Assuming the 90 days trading horizon Summit Materials Cl is expected to generate 1.76 times more return on investment than JLEN Environmental. However, Summit Materials is 1.76 times more volatile than JLEN Environmental Assets. It trades about 0.07 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.04 per unit of risk. If you would invest 2,833 in Summit Materials Cl on September 11, 2024 and sell it today you would earn a total of 2,258 from holding Summit Materials Cl or generate 79.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 91.31% |
Values | Daily Returns |
Summit Materials Cl vs. JLEN Environmental Assets
Performance |
Timeline |
Summit Materials |
JLEN Environmental Assets |
Summit Materials and JLEN Environmental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Summit Materials and JLEN Environmental
The main advantage of trading using opposite Summit Materials and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, JLEN Environmental 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 JLEN Environmental will offset losses from the drop in JLEN Environmental's long position.Summit Materials vs. AcadeMedia AB | Summit Materials vs. XLMedia PLC | Summit Materials vs. Jacquet Metal Service | Summit Materials vs. Adriatic Metals |
JLEN Environmental vs. Chocoladefabriken Lindt Spruengli | JLEN Environmental vs. Rockwood Realisation PLC | JLEN Environmental vs. Toyota Motor Corp | JLEN Environmental vs. Johnson Matthey PLC |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |