Correlation Between Summit Materials and Sezzle Common
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Sezzle Common 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 Sezzle Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Sezzle Common Stock, you can compare the effects of market volatilities on Summit Materials and Sezzle Common 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 Sezzle Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Sezzle Common.
Diversification Opportunities for Summit Materials and Sezzle Common
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Summit and Sezzle is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Sezzle Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sezzle Common Stock 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 Sezzle Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sezzle Common Stock has no effect on the direction of Summit Materials i.e., Summit Materials and Sezzle Common go up and down completely randomly.
Pair Corralation between Summit Materials and Sezzle Common
Considering the 90-day investment horizon Summit Materials is expected to generate 13.39 times less return on investment than Sezzle Common. But when comparing it to its historical volatility, Summit Materials is 7.22 times less risky than Sezzle Common. It trades about 0.14 of its potential returns per unit of risk. Sezzle Common Stock is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 21,300 in Sezzle Common Stock on September 2, 2024 and sell it today you would earn a total of 21,103 from holding Sezzle Common Stock or generate 99.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Materials vs. Sezzle Common Stock
Performance |
| Timeline |
| Summit Materials |
| Sezzle Common Stock |
Summit Materials and Sezzle Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Sezzle Common
The main advantage of trading using opposite Summit Materials and Sezzle Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Sezzle Common 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 Sezzle Common will offset losses from the drop in Sezzle Common's long position.| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. James Hardie Industries | Summit Materials vs. Eagle Materials |
| Sezzle Common vs. Pure Cycle | Sezzle Common vs. Black Hills | Sezzle Common vs. NioCorp Developments Ltd | Sezzle Common vs. Mangazeya Mining |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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