Correlation Between Summit Materials and SANOK RUBBER
Can any of the company-specific risk be diversified away by investing in both Summit Materials and SANOK RUBBER 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 SANOK RUBBER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and SANOK RUBBER ZY, you can compare the effects of market volatilities on Summit Materials and SANOK RUBBER 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 SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and SANOK RUBBER.
Diversification Opportunities for Summit Materials and SANOK RUBBER
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Summit and SANOK is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 are associated (or correlated) with SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of Summit Materials i.e., Summit Materials and SANOK RUBBER go up and down completely randomly.
Pair Corralation between Summit Materials and SANOK RUBBER
Assuming the 90 days trading horizon Summit Materials is expected to generate 1.84 times less return on investment than SANOK RUBBER. But when comparing it to its historical volatility, Summit Materials is 1.28 times less risky than SANOK RUBBER. It trades about 0.06 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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 |
Summit Materials vs. SANOK RUBBER ZY
Performance |
| Timeline |
| Summit Materials |
| SANOK RUBBER ZY |
Summit Materials and SANOK RUBBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and SANOK RUBBER
The main advantage of trading using opposite Summit Materials and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, SANOK RUBBER 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 SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.| Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc |
| SANOK RUBBER vs. PT Astra International | SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. NMI Holdings | SANOK RUBBER vs. Origin Agritech |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |