Correlation Between Summit Materials and Tradegate
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Tradegate 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 Tradegate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on Summit Materials and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Tradegate.
Diversification Opportunities for Summit Materials and Tradegate
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Summit and Tradegate is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of Summit Materials i.e., Summit Materials and Tradegate go up and down completely randomly.
Pair Corralation between Summit Materials and Tradegate
Assuming the 90 days trading horizon Summit Materials is expected to generate 1.88 times more return on investment than Tradegate. However, Summit Materials is 1.88 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about 0.06 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about -0.03 per unit of risk. If you would invest 3,020 in Summit Materials on October 28, 2024 and sell it today you would earn a total of 1,940 from holding Summit Materials or generate 64.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Materials vs. Tradegate AG Wertpapierhandels
Performance |
| Timeline |
| Summit Materials |
| Tradegate AG Wertpap |
Summit Materials and Tradegate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Tradegate
The main advantage of trading using opposite Summit Materials and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.| Summit Materials vs. CHINA EDUCATION GROUP | Summit Materials vs. Air Transport Services | Summit Materials vs. SPORT LISBOA E | Summit Materials vs. betterU Education Corp |
| Tradegate vs. Lendlease Group | Tradegate vs. NEWELL RUBBERMAID | Tradegate vs. Martin Marietta Materials | Tradegate vs. LOANDEPOT INC A |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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