Correlation Between GreenX Metals and Summit Materials
Can any of the company-specific risk be diversified away by investing in both GreenX Metals 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 GreenX Metals and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and Summit Materials Cl, you can compare the effects of market volatilities on GreenX Metals 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 GreenX Metals with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and Summit Materials.
Diversification Opportunities for GreenX Metals and Summit Materials
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between GreenX and Summit is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Summit Materials Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and GreenX Metals 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 GreenX Metals 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 GreenX Metals i.e., GreenX Metals and Summit Materials go up and down completely randomly.
Pair Corralation between GreenX Metals and Summit Materials
Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the Summit Materials. In addition to that, GreenX Metals is 1.35 times more volatile than Summit Materials Cl. It trades about 0.0 of its total potential returns per unit of risk. Summit Materials Cl is currently generating about 0.07 per unit of volatility. If you would invest 3,181 in Summit Materials Cl on September 19, 2024 and sell it today you would earn a total of 1,899 from holding Summit Materials Cl or generate 59.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.5% |
| Values | Daily Returns |
GreenX Metals vs. Summit Materials Cl
Performance |
| Timeline |
| GreenX Metals |
| Summit Materials |
GreenX Metals and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and Summit Materials
The main advantage of trading using opposite GreenX Metals and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals 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.| GreenX Metals vs. GlobalData PLC | GreenX Metals vs. Sabre Insurance Group | GreenX Metals vs. Charter Communications Cl | GreenX Metals vs. Ion Beam Applications |
| Summit Materials vs. Samsung Electronics Co | Summit Materials vs. Samsung Electronics Co | Summit Materials vs. Hyundai Motor | Summit Materials vs. Reliance Industries Ltd |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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