Correlation Between Summit Materials and Meta Platforms
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By analyzing existing cross correlation between Summit Materials and Meta Platforms, you can compare the effects of market volatilities on Summit Materials and Meta Platforms 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 Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Meta Platforms.
Diversification Opportunities for Summit Materials and Meta Platforms
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and Meta is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms 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 Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Summit Materials i.e., Summit Materials and Meta Platforms go up and down completely randomly.
Pair Corralation between Summit Materials and Meta Platforms
Assuming the 90 days trading horizon Summit Materials is expected to generate 1.59 times more return on investment than Meta Platforms. However, Summit Materials is 1.59 times more volatile than Meta Platforms. It trades about 0.21 of its potential returns per unit of risk. Meta Platforms is currently generating about 0.29 per unit of risk. If you would invest 4,280 in Summit Materials on September 5, 2024 and sell it today you would earn a total of 540.00 from holding Summit Materials or generate 12.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Materials vs. Meta Platforms
Performance |
| Timeline |
| Summit Materials |
| Meta Platforms |
Summit Materials and Meta Platforms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Meta Platforms
The main advantage of trading using opposite Summit Materials and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.| Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc |
| Meta Platforms vs. British American Tobacco | Meta Platforms vs. Summit Materials | Meta Platforms vs. Thai Beverage Public | Meta Platforms vs. IMPERIAL TOBACCO |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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