Correlation Between Repligen and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Repligen 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 Repligen and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repligen and Summit Materials, you can compare the effects of market volatilities on Repligen 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 Repligen with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repligen and Summit Materials.
Diversification Opportunities for Repligen and Summit Materials
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Repligen and Summit is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Repligen and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and Repligen 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 Repligen 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 Repligen i.e., Repligen and Summit Materials go up and down completely randomly.
Pair Corralation between Repligen and Summit Materials
Given the investment horizon of 90 days Repligen is expected to generate 73.58 times less return on investment than Summit Materials. In addition to that, Repligen is 1.49 times more volatile than Summit Materials. It trades about 0.0 of its total potential returns per unit of risk. Summit Materials is currently generating about 0.07 per unit of volatility. If you would invest 2,875 in Summit Materials on August 24, 2024 and sell it today you would earn a total of 2,291 from holding Summit Materials or generate 79.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Repligen vs. Summit Materials
Performance |
| Timeline |
| Repligen |
| Summit Materials |
Repligen and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repligen and Summit Materials
The main advantage of trading using opposite Repligen and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repligen 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.| Repligen vs. Intuitive Surgical | Repligen vs. ResMed Inc | Repligen vs. Merit Medical Systems | Repligen vs. ICU Medical |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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