Correlation Between Summit Environmental and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Summit Environmental 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 Summit Environmental and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Environmental and Summit Materials, you can compare the effects of market volatilities on Summit Environmental 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 Summit Environmental with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Environmental and Summit Materials.
Diversification Opportunities for Summit Environmental and Summit Materials
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Summit Environmental and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and Summit Environmental 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 Environmental 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 Summit Environmental i.e., Summit Environmental and Summit Materials go up and down completely randomly.
Pair Corralation between Summit Environmental and Summit Materials
If you would invest 4,741 in Summit Materials on September 1, 2024 and sell it today you would earn a total of 353.00 from holding Summit Materials or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Environmental vs. Summit Materials
Performance |
| Timeline |
| Summit Environmental |
| Summit Materials |
Summit Environmental and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Environmental and Summit Materials
The main advantage of trading using opposite Summit Environmental and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Environmental 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.| Summit Environmental vs. AmTrust Financial Services | Summit Environmental vs. Arrow Electronics | Summit Environmental vs. Lipocine | Summit Environmental vs. BCB Bancorp |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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