Correlation Between Summit Materials and CaliberCos
Can any of the company-specific risk be diversified away by investing in both Summit Materials and CaliberCos 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 CaliberCos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and CaliberCos Class A, you can compare the effects of market volatilities on Summit Materials and CaliberCos 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 CaliberCos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and CaliberCos.
Diversification Opportunities for Summit Materials and CaliberCos
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Summit and CaliberCos is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A 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 CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of Summit Materials i.e., Summit Materials and CaliberCos go up and down completely randomly.
Pair Corralation between Summit Materials and CaliberCos
Considering the 90-day investment horizon Summit Materials is expected to generate 11.49 times less return on investment than CaliberCos. But when comparing it to its historical volatility, Summit Materials is 9.56 times less risky than CaliberCos. It trades about 0.24 of its potential returns per unit of risk. CaliberCos Class A is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 50.00 in CaliberCos Class A on October 14, 2024 and sell it today you would earn a total of 15.00 from holding CaliberCos Class A or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Materials vs. CaliberCos Class A
Performance |
| Timeline |
| Summit Materials |
| CaliberCos Class A |
Summit Materials and CaliberCos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and CaliberCos
The main advantage of trading using opposite Summit Materials and CaliberCos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, CaliberCos 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 CaliberCos will offset losses from the drop in CaliberCos' 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 |
| CaliberCos vs. Summit Materials | CaliberCos vs. Aldel Financial II | CaliberCos vs. Village Super Market | CaliberCos vs. Griffon |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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