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 1.91 times more return on investment than JLEN Environmental. However, Summit Materials is 1.91 times more volatile than JLEN Environmental Assets. It trades about 0.1 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.05 per unit of risk. If you would invest 3,782 in Summit Materials Cl on September 5, 2024 and sell it today you would earn a total of 1,285 from holding Summit Materials Cl or generate 33.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.22% |
| 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. Samsung Electronics Co | Summit Materials vs. Samsung Electronics Co | Summit Materials vs. Hyundai Motor | Summit Materials vs. Toyota Motor Corp |
| JLEN Environmental vs. Discover Financial Services | JLEN Environmental vs. Central Asia Metals | JLEN Environmental vs. Summit Materials Cl | JLEN Environmental vs. St Galler Kantonalbank |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |