Correlation Between Viemed Healthcare and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Viemed Healthcare 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 Viemed Healthcare and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viemed Healthcare and Summit Materials, you can compare the effects of market volatilities on Viemed Healthcare 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 Viemed Healthcare with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and Summit Materials.
Diversification Opportunities for Viemed Healthcare and Summit Materials
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Viemed and Summit is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and Viemed Healthcare 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 Viemed Healthcare 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 Viemed Healthcare i.e., Viemed Healthcare and Summit Materials go up and down completely randomly.
Pair Corralation between Viemed Healthcare and Summit Materials
Considering the 90-day investment horizon Viemed Healthcare is expected to generate 17.69 times less return on investment than Summit Materials. In addition to that, Viemed Healthcare is 1.26 times more volatile than Summit Materials. It trades about 0.0 of its total potential returns per unit of risk. Summit Materials is currently generating about 0.06 per unit of volatility. If you would invest 3,454 in Summit Materials on August 31, 2024 and sell it today you would earn a total of 1,640 from holding Summit Materials or generate 47.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viemed Healthcare vs. Summit Materials
Performance |
| Timeline |
| Viemed Healthcare |
| Summit Materials |
Viemed Healthcare and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viemed Healthcare and Summit Materials
The main advantage of trading using opposite Viemed Healthcare and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare 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.| Viemed Healthcare vs. Profound Medical Corp | Viemed Healthcare vs. Si Bone | Viemed Healthcare vs. IRIDEX | Viemed Healthcare vs. SurModics |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |