Correlation Between Summit Materials and Wacker Neuson
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Wacker Neuson 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 Wacker Neuson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Wacker Neuson SE, you can compare the effects of market volatilities on Summit Materials and Wacker Neuson 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 Wacker Neuson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Wacker Neuson.
Diversification Opportunities for Summit Materials and Wacker Neuson
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Summit and Wacker is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Wacker Neuson SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wacker Neuson SE 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 Wacker Neuson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wacker Neuson SE has no effect on the direction of Summit Materials i.e., Summit Materials and Wacker Neuson go up and down completely randomly.
Pair Corralation between Summit Materials and Wacker Neuson
Assuming the 90 days trading horizon Summit Materials is expected to generate 0.53 times more return on investment than Wacker Neuson. However, Summit Materials is 1.9 times less risky than Wacker Neuson. It trades about 0.18 of its potential returns per unit of risk. Wacker Neuson SE is currently generating about 0.02 per unit of risk. If you would invest 4,840 in Summit Materials on October 25, 2024 and sell it today you would earn a total of 160.00 from holding Summit Materials or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Summit Materials vs. Wacker Neuson SE
Performance |
| Timeline |
| Summit Materials |
| Wacker Neuson SE |
Summit Materials and Wacker Neuson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Wacker Neuson
The main advantage of trading using opposite Summit Materials and Wacker Neuson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Wacker Neuson 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 Wacker Neuson will offset losses from the drop in Wacker Neuson's long position.| Summit Materials vs. ANGANG STEEL H | Summit Materials vs. United Rentals | Summit Materials vs. ELL ENVIRONHLDGS HD 0001 | Summit Materials vs. Tianjin Capital Environmental |
| Wacker Neuson vs. Q2M Managementberatung AG | Wacker Neuson vs. CEOTRONICS | Wacker Neuson vs. AGF Management Limited | Wacker Neuson vs. MidCap Financial Investment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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