Correlation Between Denison Mines and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Denison Mines and Summit Materials 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 Denison Mines and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Denison Mines Corp and Summit Materials, you can compare the effects of market volatilities on Denison Mines and Summit Materials 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 Denison Mines with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Denison Mines and Summit Materials.
Diversification Opportunities for Denison Mines and Summit Materials
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Denison and Summit is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Denison Mines Corp and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and Denison Mines 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 Denison Mines Corp are associated (or correlated) with Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of Denison Mines i.e., Denison Mines and Summit Materials go up and down completely randomly.
Pair Corralation between Denison Mines and Summit Materials
Considering the 90-day investment horizon Denison Mines Corp is expected to generate 8.9 times more return on investment than Summit Materials. However, Denison Mines is 8.9 times more volatile than Summit Materials. It trades about 0.12 of its potential returns per unit of risk. Summit Materials is currently generating about 0.33 per unit of risk. If you would invest 188.00 in Denison Mines Corp on October 25, 2024 and sell it today you would earn a total of 16.00 from holding Denison Mines Corp or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Denison Mines Corp vs. Summit Materials
Performance |
| Timeline |
| Denison Mines Corp |
| Summit Materials |
Denison Mines and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Denison Mines and Summit Materials
The main advantage of trading using opposite Denison Mines and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Denison Mines position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| Denison Mines vs. Energy Fuels | Denison Mines vs. enCore Energy Corp | Denison Mines vs. Ur Energy | Denison Mines vs. Cameco Corp |
| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. United States Lime | Summit Materials vs. James Hardie Industries |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |