Correlation Between Golden Matrix and Summit Materials

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

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

Diversification Opportunities for Golden Matrix and Summit Materials

-0.04

Correlation Coefficient

Golden Matrix  Summit Materials

Good diversification

The 3 months correlation between Golden and Summit is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Golden Matrix Group and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and Golden Matrix 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 Golden Matrix Group 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 Golden Matrix i.e., Golden Matrix and Summit Materials go up and down completely randomly.

Pair Corralation between Golden Matrix and Summit Materials

Given the investment horizon of 90 days Golden Matrix Group is expected to generate 15.21 times more return on investment than Summit Materials. However, Golden Matrix is 15.21 times more volatile than Summit Materials. It trades about 0.04 of its potential returns per unit of risk. Summit Materials is currently generating about 0.33 per unit of risk. If you would invest  203.00  in Golden Matrix Group on December 28, 2024 and sell it today you would earn a total of  12.00  from holding Golden Matrix Group or generate 5.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	48.33%
Values	Daily Returns

Golden Matrix Group  vs.  Summit Materials

Golden Matrix Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Matrix Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Golden Matrix demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Summit Materials

Risk-Adjusted Performance

Solid

Over the last 90 days Summit Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Summit Materials may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Golden Matrix and Summit Materials

The main advantage of trading using opposite Golden Matrix and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Matrix 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.

The idea behind Golden Matrix Group and Summit Materials 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.