Correlation Between SANOK RUBBER and Summit Materials
Can any of the company-specific risk be diversified away by investing in both SANOK RUBBER and Summit Materials 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 SANOK RUBBER and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANOK RUBBER ZY and Summit Materials, you can compare the effects of market volatilities on SANOK RUBBER and Summit Materials 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 SANOK RUBBER with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and Summit Materials.
Diversification Opportunities for SANOK RUBBER and Summit Materials
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SANOK and Summit is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and SANOK RUBBER 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 SANOK RUBBER ZY are associated (or correlated) with Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and Summit Materials go up and down completely randomly.
Pair Corralation between SANOK RUBBER and Summit Materials
Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 1.28 times more return on investment than Summit Materials. However, SANOK RUBBER is 1.28 times more volatile than Summit Materials. It trades about 0.08 of its potential returns per unit of risk. Summit Materials is currently generating about 0.06 per unit of risk. If you would invest 167.00 in SANOK RUBBER ZY on August 26, 2024 and sell it today you would earn a total of 267.00 from holding SANOK RUBBER ZY or generate 159.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANOK RUBBER ZY vs. Summit Materials
Performance |
| Timeline |
| SANOK RUBBER ZY |
| Summit Materials |
SANOK RUBBER and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANOK RUBBER and Summit Materials
The main advantage of trading using opposite SANOK RUBBER and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| SANOK RUBBER vs. PT Astra International | SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. NMI Holdings | SANOK RUBBER vs. Origin Agritech |
| Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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