Correlation Between Summit Materials and Artemis Resources
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Artemis Resources 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 Artemis Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Artemis Resources, you can compare the effects of market volatilities on Summit Materials and Artemis Resources 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 Artemis Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Artemis Resources.
Diversification Opportunities for Summit Materials and Artemis Resources
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Summit and Artemis is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Artemis Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artemis Resources 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 Artemis Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artemis Resources has no effect on the direction of Summit Materials i.e., Summit Materials and Artemis Resources go up and down completely randomly.
Pair Corralation between Summit Materials and Artemis Resources
Assuming the 90 days trading horizon Summit Materials is expected to generate 2.2 times less return on investment than Artemis Resources. But when comparing it to its historical volatility, Summit Materials is 4.09 times less risky than Artemis Resources. It trades about 0.06 of its potential returns per unit of risk. Artemis Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.80 in Artemis Resources on September 12, 2024 and sell it today you would lose (0.20) from holding Artemis Resources or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.88% |
| Values | Daily Returns |
Summit Materials vs. Artemis Resources
Performance |
| Timeline |
| Summit Materials |
| Artemis Resources |
Summit Materials and Artemis Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Artemis Resources
The main advantage of trading using opposite Summit Materials and Artemis Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Artemis Resources 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 Artemis Resources will offset losses from the drop in Artemis Resources' long position.| Summit Materials vs. Datadog | Summit Materials vs. United Natural Foods | Summit Materials vs. MICRONIC MYDATA | Summit Materials vs. PT Indofood Sukses |
| Artemis Resources vs. Summit Materials | Artemis Resources vs. GOODYEAR T RUBBER | Artemis Resources vs. SOFI TECHNOLOGIES | Artemis Resources vs. VULCAN MATERIALS |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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