Correlation Between Summit Materials and Getty Realty
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Getty Realty 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 Getty Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Getty Realty, you can compare the effects of market volatilities on Summit Materials and Getty Realty 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 Getty Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Getty Realty.
Diversification Opportunities for Summit Materials and Getty Realty
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and Getty is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty 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 Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of Summit Materials i.e., Summit Materials and Getty Realty go up and down completely randomly.
Pair Corralation between Summit Materials and Getty Realty
Considering the 90-day investment horizon Summit Materials is expected to generate 1.63 times more return on investment than Getty Realty. However, Summit Materials is 1.63 times more volatile than Getty Realty. It trades about 0.07 of its potential returns per unit of risk. Getty Realty is currently generating about 0.01 per unit of risk. If you would invest 2,876 in Summit Materials on September 12, 2024 and sell it today you would earn a total of 2,214 from holding Summit Materials or generate 76.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Materials vs. Getty Realty
Performance |
| Timeline |
| Summit Materials |
| Getty Realty |
Summit Materials and Getty Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Getty Realty
The main advantage of trading using opposite Summit Materials and Getty Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Getty Realty 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 Getty Realty will offset losses from the drop in Getty Realty'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 |
| Getty Realty vs. Regency Centers | Getty Realty vs. Site Centers Corp | Getty Realty vs. Brixmor Property | Getty Realty vs. Tanger Factory Outlet |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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