Correlation Between Summit Materials and BKV
Can any of the company-specific risk be diversified away by investing in both Summit Materials and BKV 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 BKV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and BKV Corporation, you can compare the effects of market volatilities on Summit Materials and BKV 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 BKV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and BKV.
Diversification Opportunities for Summit Materials and BKV
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and BKV is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and BKV Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKV Corporation 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 BKV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKV Corporation has no effect on the direction of Summit Materials i.e., Summit Materials and BKV go up and down completely randomly.
Pair Corralation between Summit Materials and BKV
Considering the 90-day investment horizon Summit Materials is expected to under-perform the BKV. But the stock apears to be less risky and, when comparing its historical volatility, Summit Materials is 7.44 times less risky than BKV. The stock trades about -0.06 of its potential returns per unit of risk. The BKV Corporation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,142 in BKV Corporation on September 24, 2024 and sell it today you would earn a total of 55.00 from holding BKV Corporation or generate 2.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Summit Materials vs. BKV Corp.
Performance |
Timeline |
Summit Materials |
BKV Corporation |
Summit Materials and BKV Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Summit Materials and BKV
The main advantage of trading using opposite Summit Materials and BKV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, BKV 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 BKV will offset losses from the drop in BKV's long position.Summit Materials vs. Cemex SAB de | Summit Materials vs. Martin Marietta Materials | Summit Materials vs. United States Lime | Summit Materials vs. James Hardie Industries |
BKV vs. Antero Resources Corp | BKV vs. Empire Petroleum Corp | BKV vs. Permian Resources | BKV vs. SandRidge Energy |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
CEOs Directory Screen CEOs from public companies around the world | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |