Correlation Between Summit Materials and THERMO FISHER
Can any of the company-specific risk be diversified away by investing in both Summit Materials and THERMO FISHER 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 THERMO FISHER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and THERMO FISHER SCIEN, you can compare the effects of market volatilities on Summit Materials and THERMO FISHER 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 THERMO FISHER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and THERMO FISHER.
Diversification Opportunities for Summit Materials and THERMO FISHER
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and THERMO is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and THERMO FISHER SCIEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THERMO FISHER SCIEN 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 THERMO FISHER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THERMO FISHER SCIEN has no effect on the direction of Summit Materials i.e., Summit Materials and THERMO FISHER go up and down completely randomly.
Pair Corralation between Summit Materials and THERMO FISHER
Assuming the 90 days trading horizon Summit Materials is expected to generate 1.14 times more return on investment than THERMO FISHER. However, Summit Materials is 1.14 times more volatile than THERMO FISHER SCIEN. It trades about 0.04 of its potential returns per unit of risk. THERMO FISHER SCIEN is currently generating about -0.05 per unit of risk. If you would invest 4,720 in Summit Materials on September 12, 2024 and sell it today you would earn a total of 60.00 from holding Summit Materials or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Summit Materials vs. THERMO FISHER SCIEN
Performance |
| Timeline |
| Summit Materials |
| THERMO FISHER SCIEN |
Summit Materials and THERMO FISHER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and THERMO FISHER
The main advantage of trading using opposite Summit Materials and THERMO FISHER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, THERMO FISHER 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 THERMO FISHER will offset losses from the drop in THERMO FISHER's long position.| Summit Materials vs. Datadog | Summit Materials vs. United Natural Foods | Summit Materials vs. MICRONIC MYDATA | Summit Materials vs. PT Indofood Sukses |
| THERMO FISHER vs. OAKTRSPECLENDNEW | THERMO FISHER vs. CHIBA BANK | THERMO FISHER vs. Webster Financial | THERMO FISHER vs. Tradegate AG Wertpapierhandelsbank |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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