Correlation Between Summit Materials and Panther Metals
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Panther 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 Panther 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 Panther Metals PLC, you can compare the effects of market volatilities on Summit Materials and Panther 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 Panther Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Panther Metals.
Diversification Opportunities for Summit Materials and Panther Metals
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and Panther is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials Cl and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC 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 Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Summit Materials i.e., Summit Materials and Panther Metals go up and down completely randomly.
Pair Corralation between Summit Materials and Panther Metals
Assuming the 90 days trading horizon Summit Materials is expected to generate 38.17 times less return on investment than Panther Metals. But when comparing it to its historical volatility, Summit Materials Cl is 34.21 times less risky than Panther Metals. It trades about 0.06 of its potential returns per unit of risk. Panther Metals PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 11,625 in Panther Metals PLC on September 19, 2024 and sell it today you would lose (3,375) from holding Panther Metals PLC or give up 29.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.12% |
| Values | Daily Returns |
Summit Materials Cl vs. Panther Metals PLC
Performance |
| Timeline |
| Summit Materials |
| Panther Metals PLC |
Summit Materials and Panther Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Panther Metals
The main advantage of trading using opposite Summit Materials and Panther Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Panther 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 Panther Metals will offset losses from the drop in Panther 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 |
| Panther Metals vs. Givaudan SA | Panther Metals vs. Antofagasta PLC | Panther Metals vs. Ferrexpo PLC | Panther 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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