Correlation Between Haitong Securities and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Haitong Securities 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 Haitong Securities and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haitong Securities Co and Summit Materials, you can compare the effects of market volatilities on Haitong Securities 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 Haitong Securities with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitong Securities and Summit Materials.
Diversification Opportunities for Haitong Securities and Summit Materials
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haitong and Summit is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Haitong Securities Co and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and Haitong Securities 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 Haitong Securities Co 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 Haitong Securities i.e., Haitong Securities and Summit Materials go up and down completely randomly.
Pair Corralation between Haitong Securities and Summit Materials
Assuming the 90 days horizon Haitong Securities Co is expected to generate 2.37 times more return on investment than Summit Materials. However, Haitong Securities is 2.37 times more volatile than Summit Materials. It trades about 0.06 of its potential returns per unit of risk. Summit Materials is currently generating about 0.06 per unit of risk. If you would invest 41.00 in Haitong Securities Co on September 12, 2024 and sell it today you would earn a total of 46.00 from holding Haitong Securities Co or generate 112.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Haitong Securities Co vs. Summit Materials
Performance |
| Timeline |
| Haitong Securities |
| Summit Materials |
Haitong Securities and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitong Securities and Summit Materials
The main advantage of trading using opposite Haitong Securities and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitong Securities 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.| Haitong Securities vs. Summit Materials | Haitong Securities vs. Luckin Coffee | Haitong Securities vs. PRECISION DRILLING P | Haitong Securities vs. BORR DRILLING NEW |
| Summit Materials vs. Datadog | Summit Materials vs. United Natural Foods | Summit Materials vs. MICRONIC MYDATA | Summit Materials vs. PT Indofood Sukses |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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