Correlation Between SNC Lavalin and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both SNC Lavalin and Minerals Technologies 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 SNC Lavalin and Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNC Lavalin Group and Minerals Technologies, you can compare the effects of market volatilities on SNC Lavalin and Minerals Technologies 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 SNC Lavalin with a short position of Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNC Lavalin and Minerals Technologies.
Diversification Opportunities for SNC Lavalin and Minerals Technologies
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SNC and Minerals is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SNC Lavalin Group and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies and SNC Lavalin 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 SNC Lavalin Group are associated (or correlated) with Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of SNC Lavalin i.e., SNC Lavalin and Minerals Technologies go up and down completely randomly.
Pair Corralation between SNC Lavalin and Minerals Technologies
Assuming the 90 days horizon SNC Lavalin Group is expected to generate 1.49 times more return on investment than Minerals Technologies. However, SNC Lavalin is 1.49 times more volatile than Minerals Technologies. It trades about 0.24 of its potential returns per unit of risk. Minerals Technologies is currently generating about 0.12 per unit of risk. If you would invest 4,007 in SNC Lavalin Group on August 28, 2024 and sell it today you would earn a total of 1,349 from holding SNC Lavalin Group or generate 33.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNC Lavalin Group vs. Minerals Technologies
Performance |
| Timeline |
| SNC Lavalin Group |
| Minerals Technologies |
SNC Lavalin and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNC Lavalin and Minerals Technologies
The main advantage of trading using opposite SNC Lavalin and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNC Lavalin position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| SNC Lavalin vs. Aecon Group | SNC Lavalin vs. Acciona SA | SNC Lavalin vs. WSP Global | SNC Lavalin vs. SIG Combibloc Group |
| Minerals Technologies vs. Oil Dri | Minerals Technologies vs. H B Fuller | Minerals Technologies vs. Northern Technologies | Minerals Technologies vs. Cabot |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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