Correlation Between Summit Materials and Global Partner
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Global Partner 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 Global Partner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Global Partner Acq, you can compare the effects of market volatilities on Summit Materials and Global Partner 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 Global Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Global Partner.
Diversification Opportunities for Summit Materials and Global Partner
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Summit and Global is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Global Partner Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partner Acq 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 Global Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partner Acq has no effect on the direction of Summit Materials i.e., Summit Materials and Global Partner go up and down completely randomly.
Pair Corralation between Summit Materials and Global Partner
If you would invest 4,601 in Summit Materials on August 30, 2024 and sell it today you would earn a total of 508.00 from holding Summit Materials or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Summit Materials vs. Global Partner Acq
Performance |
| Timeline |
| Summit Materials |
| Global Partner Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Summit Materials and Global Partner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Global Partner
The main advantage of trading using opposite Summit Materials and Global Partner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Global Partner 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 Global Partner will offset losses from the drop in Global Partner'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 |
| Global Partner vs. Fast Retailing Co | Global Partner vs. ATRenew Inc DRC | Global Partner vs. Nomura Holdings ADR | Global Partner vs. Sea |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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