Correlation Between Summit Materials and Omni Health
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Omni Health 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 Omni Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Omni Health, you can compare the effects of market volatilities on Summit Materials and Omni Health 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 Omni Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Omni Health.
Diversification Opportunities for Summit Materials and Omni Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summit and Omni is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Omni Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Health 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 Omni Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Health has no effect on the direction of Summit Materials i.e., Summit Materials and Omni Health go up and down completely randomly.
Pair Corralation between Summit Materials and Omni Health
If you would invest 3,913 in Summit Materials on August 28, 2024 and sell it today you would earn a total of 1,162 from holding Summit Materials or generate 29.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Summit Materials vs. Omni Health
Performance |
| Timeline |
| Summit Materials |
| Omni Health |
Summit Materials and Omni Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Omni Health
The main advantage of trading using opposite Summit Materials and Omni Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Omni Health 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 Omni Health will offset losses from the drop in Omni Health'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 |
| Omni Health vs. Caf Serendipity Holdings | Omni Health vs. Green Cures Botanical | Omni Health vs. Vapor Group | Omni Health vs. Ubiquitech Software |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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