Correlation Between Summit Materials and ARMADA HOFFLER
Can any of the company-specific risk be diversified away by investing in both Summit Materials and ARMADA HOFFLER 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 ARMADA HOFFLER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and ARMADA HOFFLER PR, you can compare the effects of market volatilities on Summit Materials and ARMADA HOFFLER 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 ARMADA HOFFLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and ARMADA HOFFLER.
Diversification Opportunities for Summit Materials and ARMADA HOFFLER
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Summit and ARMADA is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and ARMADA HOFFLER PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARMADA HOFFLER PR 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 ARMADA HOFFLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARMADA HOFFLER PR has no effect on the direction of Summit Materials i.e., Summit Materials and ARMADA HOFFLER go up and down completely randomly.
Pair Corralation between Summit Materials and ARMADA HOFFLER
Assuming the 90 days trading horizon Summit Materials is expected to generate 0.84 times more return on investment than ARMADA HOFFLER. However, Summit Materials is 1.19 times less risky than ARMADA HOFFLER. It trades about 0.22 of its potential returns per unit of risk. ARMADA HOFFLER PR is currently generating about -0.04 per unit of risk. If you would invest 4,860 in Summit Materials on October 22, 2024 and sell it today you would earn a total of 190.00 from holding Summit Materials or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Materials vs. ARMADA HOFFLER PR
Performance |
| Timeline |
| Summit Materials |
| ARMADA HOFFLER PR |
Summit Materials and ARMADA HOFFLER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and ARMADA HOFFLER
The main advantage of trading using opposite Summit Materials and ARMADA HOFFLER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, ARMADA HOFFLER 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 ARMADA HOFFLER will offset losses from the drop in ARMADA HOFFLER's long position.| Summit Materials vs. Clearside Biomedical | Summit Materials vs. Nexstar Media Group | Summit Materials vs. Merit Medical Systems | Summit Materials vs. CompuGroup Medical SE |
| ARMADA HOFFLER vs. Compugroup Medical SE | ARMADA HOFFLER vs. Coor Service Management | ARMADA HOFFLER vs. Brockhaus Capital Management | ARMADA HOFFLER vs. Diamyd Medical AB |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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