Correlation Between Viking Holdings and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Viking Holdings and Summit Materials 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 Viking Holdings and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viking Holdings and Summit Materials, you can compare the effects of market volatilities on Viking Holdings 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 Viking Holdings with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viking Holdings and Summit Materials.
Diversification Opportunities for Viking Holdings and Summit Materials
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Viking and Summit is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Viking Holdings and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and Viking Holdings 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 Viking Holdings 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 Viking Holdings i.e., Viking Holdings and Summit Materials go up and down completely randomly.
Pair Corralation between Viking Holdings and Summit Materials
Considering the 90-day investment horizon Viking Holdings is expected to under-perform the Summit Materials. In addition to that, Viking Holdings is 15.31 times more volatile than Summit Materials. It trades about -0.02 of its total potential returns per unit of risk. Summit Materials is currently generating about 0.25 per unit of volatility. If you would invest 5,229 in Summit Materials on November 28, 2024 and sell it today you would earn a total of 20.00 from holding Summit Materials or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
Viking Holdings vs. Summit Materials
Performance |
| Timeline |
| Viking Holdings |
| Summit Materials |
Risk-Adjusted Performance
Good
Weak | Strong |
Viking Holdings and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viking Holdings and Summit Materials
The main advantage of trading using opposite Viking Holdings and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viking Holdings 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.| Viking Holdings vs. Zoom Video Communications | Viking Holdings vs. LATAM Airlines Group | Viking Holdings vs. Mesa Air Group | Viking Holdings vs. International Consolidated Airlines |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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