Correlation Between Glucose Health and Summit Midstream

Can any of the company-specific risk be diversified away by investing in both Glucose Health and Summit Midstream 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 Glucose Health and Summit Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Glucose Health and Summit Midstream Partners, you can compare the effects of market volatilities on Glucose Health and Summit Midstream 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 Glucose Health with a short position of Summit Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glucose Health and Summit Midstream.

Diversification Opportunities for Glucose Health and Summit Midstream

-0.6

Correlation Coefficient

Glucose Health  Summit Midstream

Excellent diversification

The 3 months correlation between Glucose and Summit is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Glucose Health and Summit Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Midstream Partners and Glucose Health 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 Glucose Health are associated (or correlated) with Summit Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Midstream Partners has no effect on the direction of Glucose Health i.e., Glucose Health and Summit Midstream go up and down completely randomly.

Pair Corralation between Glucose Health and Summit Midstream

Given the investment horizon of 90 days Glucose Health is expected to generate 1.77 times more return on investment than Summit Midstream. However, Glucose Health is 1.77 times more volatile than Summit Midstream Partners. It trades about 0.03 of its potential returns per unit of risk. Summit Midstream Partners is currently generating about 0.0 per unit of risk. If you would invest  51.00  in Glucose Health on October 5, 2024 and sell it today you would lose (36.00) from holding Glucose Health or give up 70.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	78.91%
Values	Daily Returns

Glucose Health  vs.  Summit Midstream Partners

Glucose Health

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Glucose Health are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Glucose Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Summit Midstream Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Summit Midstream Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Summit Midstream is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Glucose Health and Summit Midstream

The main advantage of trading using opposite Glucose Health and Summit Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glucose Health position performs unexpectedly, Summit Midstream 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 Midstream will offset losses from the drop in Summit Midstream's long position.

The idea behind Glucose Health and Summit Midstream Partners 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.