Correlation Between Summit Materials and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Summit Materials and AerSale Corp 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 Materials and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and AerSale Corp, you can compare the effects of market volatilities on Summit Materials and AerSale Corp 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 Materials with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and AerSale Corp.
Diversification Opportunities for Summit Materials and AerSale Corp
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Summit and AerSale is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Summit Materials 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 Materials are associated (or correlated) with AerSale Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerSale Corp has no effect on the direction of Summit Materials i.e., Summit Materials and AerSale Corp go up and down completely randomly.
Pair Corralation between Summit Materials and AerSale Corp
Considering the 90-day investment horizon Summit Materials is expected to generate 0.73 times more return on investment than AerSale Corp. However, Summit Materials is 1.37 times less risky than AerSale Corp. It trades about 0.06 of its potential returns per unit of risk. AerSale Corp is currently generating about -0.01 per unit of risk. If you would invest 4,270 in Summit Materials on September 4, 2024 and sell it today you would earn a total of 822.00 from holding Summit Materials or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Materials vs. AerSale Corp
Performance |
| Timeline |
| Summit Materials |
| AerSale Corp |
Summit Materials and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and AerSale Corp
The main advantage of trading using opposite Summit Materials and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, AerSale Corp 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 AerSale Corp will offset losses from the drop in AerSale Corp's long position.| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. United States Lime |
| AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Corporacion America Airports | AerSale Corp vs. Aeroports de Paris |
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.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |