Correlation Between Summit Materials and China Clean
Can any of the company-specific risk be diversified away by investing in both Summit Materials and China Clean 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 China Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and China Clean Energy, you can compare the effects of market volatilities on Summit Materials and China Clean 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 China Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and China Clean.
Diversification Opportunities for Summit Materials and China Clean
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and China Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Clean Energy 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 China Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Clean Energy has no effect on the direction of Summit Materials i.e., Summit Materials and China Clean go up and down completely randomly.
Pair Corralation between Summit Materials and China Clean
If you would invest 2,739 in Summit Materials on January 13, 2025 and sell it today you would earn a total of 2,510 from holding Summit Materials or generate 91.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.96% |
| Values | Daily Returns |
Summit Materials vs. China Clean Energy
Performance |
| Timeline |
| Summit Materials |
Risk-Adjusted Performance
Strong
Weak | Strong |
| China Clean Energy |
Summit Materials and China Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and China Clean
The main advantage of trading using opposite Summit Materials and China Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, China Clean 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 China Clean will offset losses from the drop in China Clean's long position.| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. United States Lime | Summit Materials vs. James Hardie Industries |
| China Clean vs. Perseus Mining Limited | China Clean vs. Emerson Radio | China Clean vs. East Africa Metals | China Clean vs. Chester Mining |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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