Correlation Between Summit Materials and International Game

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Can any of the company-specific risk be diversified away by investing in both Summit Materials and International Game 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 International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and International Game Technology, you can compare the effects of market volatilities on Summit Materials and International Game 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 International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and International Game.

Diversification Opportunities for Summit Materials and International Game

SummitInternationalDiversified AwaySummitInternationalDiversified Away100%
-0.59
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Summit and International is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game 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 International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of Summit Materials i.e., Summit Materials and International Game go up and down completely randomly.

Pair Corralation between Summit Materials and International Game

Assuming the 90 days trading horizon Summit Materials is expected to generate 0.88 times more return on investment than International Game. However, Summit Materials is 1.13 times less risky than International Game. It trades about 0.14 of its potential returns per unit of risk. International Game Technology is currently generating about -0.1 per unit of risk. If you would invest  4,380  in Summit Materials on October 31, 2024 and sell it today you would earn a total of  620.00  from holding Summit Materials or generate 14.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Summit Materials  vs.  International Game Technology

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -100102030
JavaScript chart by amCharts 3.21.157SU 7IG
       Timeline  
Summit Materials 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Summit Materials are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Summit Materials unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan4244464850
International Game 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days International Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1616.51717.51818.51919.5

Summit Materials and International Game Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.39-4.79-3.18-1.580.01.763.565.357.14 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.157SU 7IG
       Returns  

Pair Trading with Summit Materials and International Game

The main advantage of trading using opposite Summit Materials and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.
The idea behind Summit Materials and International Game Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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