Correlation Between 26441CBE4 and Summit Materials
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By analyzing existing cross correlation between US26441CBE49 and Summit Materials, you can compare the effects of market volatilities on 26441CBE4 and Summit Materials 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 26441CBE4 with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26441CBE4 and Summit Materials.
Diversification Opportunities for 26441CBE4 and Summit Materials
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 26441CBE4 and Summit is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding US26441CBE49 and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and 26441CBE4 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 US26441CBE49 are associated (or correlated) with Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of 26441CBE4 i.e., 26441CBE4 and Summit Materials go up and down completely randomly.
Pair Corralation between 26441CBE4 and Summit Materials
Assuming the 90 days trading horizon 26441CBE4 is expected to generate 2.66 times less return on investment than Summit Materials. But when comparing it to its historical volatility, US26441CBE49 is 4.07 times less risky than Summit Materials. It trades about 0.21 of its potential returns per unit of risk. Summit Materials is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,783 in Summit Materials on September 2, 2024 and sell it today you would earn a total of 311.00 from holding Summit Materials or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
US26441CBE49 vs. Summit Materials
Performance |
| Timeline |
| US26441CBE49 |
| Summit Materials |
26441CBE4 and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 26441CBE4 and Summit Materials
The main advantage of trading using opposite 26441CBE4 and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26441CBE4 position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| 26441CBE4 vs. Summit Materials | 26441CBE4 vs. Highway Holdings Limited | 26441CBE4 vs. Vindicator Silver Lead Mining | 26441CBE4 vs. Mangazeya Mining |
| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. James Hardie Industries | Summit Materials vs. Eagle Materials |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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