Correlation Between Summit Materials and Calbee
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Calbee 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 Calbee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Calbee Inc, you can compare the effects of market volatilities on Summit Materials and Calbee 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 Calbee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Calbee.
Diversification Opportunities for Summit Materials and Calbee
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Summit and Calbee is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Calbee Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calbee Inc 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 Calbee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calbee Inc has no effect on the direction of Summit Materials i.e., Summit Materials and Calbee go up and down completely randomly.
Pair Corralation between Summit Materials and Calbee
Assuming the 90 days trading horizon Summit Materials is expected to generate 0.5 times more return on investment than Calbee. However, Summit Materials is 2.0 times less risky than Calbee. It trades about 0.08 of its potential returns per unit of risk. Calbee Inc is currently generating about -0.18 per unit of risk. If you would invest 4,940 in Summit Materials on November 4, 2024 and sell it today you would earn a total of 60.00 from holding Summit Materials or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Summit Materials vs. Calbee Inc
Performance |
| Timeline |
| Summit Materials |
| Calbee Inc |
Summit Materials and Calbee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Calbee
The main advantage of trading using opposite Summit Materials and Calbee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Calbee 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 Calbee will offset losses from the drop in Calbee's long position.| Summit Materials vs. Khiron Life Sciences | Summit Materials vs. Gol Intelligent Airlines | Summit Materials vs. SOUTHWEST AIRLINES | Summit Materials vs. Mount Gibson Iron |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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