Correlation Between Jeld Wen and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Jeld Wen 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 Jeld Wen and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeld Wen Holding and Summit Materials, you can compare the effects of market volatilities on Jeld Wen 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 Jeld Wen with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and Summit Materials.
Diversification Opportunities for Jeld Wen and Summit Materials
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jeld and Summit is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and Jeld Wen 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 Jeld Wen Holding 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 Jeld Wen i.e., Jeld Wen and Summit Materials go up and down completely randomly.
Pair Corralation between Jeld Wen and Summit Materials
Given the investment horizon of 90 days Jeld Wen Holding is expected to under-perform the Summit Materials. In addition to that, Jeld Wen is 1.73 times more volatile than Summit Materials. It trades about -0.04 of its total potential returns per unit of risk. Summit Materials is currently generating about 0.12 per unit of volatility. If you would invest 3,774 in Summit Materials on September 2, 2024 and sell it today you would earn a total of 1,320 from holding Summit Materials or generate 34.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeld Wen Holding vs. Summit Materials
Performance |
| Timeline |
| Jeld Wen Holding |
| Summit Materials |
Jeld Wen and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeld Wen and Summit Materials
The main advantage of trading using opposite Jeld Wen and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeld Wen 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.| Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Quanex Building Products | Jeld Wen vs. Perma Pipe International Holdings | Jeld Wen vs. Interface |
| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. James Hardie Industries | Summit Materials vs. Eagle Materials |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |