Correlation Between Summit Materials and Siam Cement
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Siam Cement 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 Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and The Siam Cement, you can compare the effects of market volatilities on Summit Materials and Siam Cement 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 Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Siam Cement.
Diversification Opportunities for Summit Materials and Siam Cement
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Summit and Siam is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement 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 Siam Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Cement has no effect on the direction of Summit Materials i.e., Summit Materials and Siam Cement go up and down completely randomly.
Pair Corralation between Summit Materials and Siam Cement
If you would invest 3,777 in Summit Materials on November 2, 2024 and sell it today you would earn a total of 1,460 from holding Summit Materials or generate 38.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.97% |
| Values | Daily Returns |
Summit Materials vs. The Siam Cement
Performance |
| Timeline |
| Summit Materials |
| Siam Cement |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Summit Materials and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Siam Cement
The main advantage of trading using opposite Summit Materials and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Siam Cement 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 Siam Cement will offset losses from the drop in Siam Cement'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 |
| Siam Cement vs. Hurco Companies | Siam Cement vs. EMCOR Group | Siam Cement vs. Southwest Airlines | Siam Cement vs. Frontier Group Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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