Correlation Between Summit Midstream and Whitbread Plc
Can any of the company-specific risk be diversified away by investing in both Summit Midstream and Whitbread Plc 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 Midstream and Whitbread Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Midstream and Whitbread plc, you can compare the effects of market volatilities on Summit Midstream and Whitbread Plc 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 Midstream with a short position of Whitbread Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Midstream and Whitbread Plc.
Diversification Opportunities for Summit Midstream and Whitbread Plc
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Summit and Whitbread is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Summit Midstream and Whitbread plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread plc and Summit Midstream 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 Midstream are associated (or correlated) with Whitbread Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread plc has no effect on the direction of Summit Midstream i.e., Summit Midstream and Whitbread Plc go up and down completely randomly.
Pair Corralation between Summit Midstream and Whitbread Plc
If you would invest 3,787 in Summit Midstream on November 5, 2024 and sell it today you would earn a total of 367.00 from holding Summit Midstream or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Midstream vs. Whitbread plc
Performance |
| Timeline |
| Summit Midstream |
| Whitbread plc |
Summit Midstream and Whitbread Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Midstream and Whitbread Plc
The main advantage of trading using opposite Summit Midstream and Whitbread Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Midstream position performs unexpectedly, Whitbread Plc 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 Whitbread Plc will offset losses from the drop in Whitbread Plc's long position.| Summit Midstream vs. Golden Energy Offshore | Summit Midstream vs. BorgWarner | Summit Midstream vs. WT Offshore | Summit Midstream vs. Modine Manufacturing |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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