Correlation Between 40434LAN5 and Summit Materials
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By analyzing existing cross correlation between HPQ 55 15 JAN 33 and Summit Materials, you can compare the effects of market volatilities on 40434LAN5 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 40434LAN5 with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of 40434LAN5 and Summit Materials.
Diversification Opportunities for 40434LAN5 and Summit Materials
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 40434LAN5 and Summit is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding HPQ 55 15 JAN 33 and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and 40434LAN5 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 HPQ 55 15 JAN 33 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 40434LAN5 i.e., 40434LAN5 and Summit Materials go up and down completely randomly.
Pair Corralation between 40434LAN5 and Summit Materials
Assuming the 90 days trading horizon HPQ 55 15 JAN 33 is expected to under-perform the Summit Materials. But the bond apears to be less risky and, when comparing its historical volatility, HPQ 55 15 JAN 33 is 2.0 times less risky than Summit Materials. The bond trades about -0.19 of its potential returns per unit of risk. The Summit Materials is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 3,706 in Summit Materials on September 3, 2024 and sell it today you would earn a total of 1,388 from holding Summit Materials or generate 37.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
HPQ 55 15 JAN 33 vs. Summit Materials
Performance |
| Timeline |
| HPQ 55 15 |
| Summit Materials |
40434LAN5 and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 40434LAN5 and Summit Materials
The main advantage of trading using opposite 40434LAN5 and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 40434LAN5 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.| 40434LAN5 vs. Summit Materials | 40434LAN5 vs. Titan Machinery | 40434LAN5 vs. Baozun Inc | 40434LAN5 vs. NioCorp Developments Ltd |
| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. United States Lime | Summit Materials vs. James Hardie Industries |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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