Correlation Between Summit Materials and Uranium Energy

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

By analyzing existing cross correlation between Summit Materials and Uranium Energy Corp, you can compare the effects of market volatilities on Summit Materials and Uranium Energy 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 Uranium Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Uranium Energy.

Diversification Opportunities for Summit Materials and Uranium Energy

-0.72

Correlation Coefficient

Summit Materials  Uranium Energy

Pay attention - limited upside

The 3 months correlation between Summit and Uranium is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Uranium Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uranium Energy Corp 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 Uranium Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uranium Energy Corp has no effect on the direction of Summit Materials i.e., Summit Materials and Uranium Energy go up and down completely randomly.

Pair Corralation between Summit Materials and Uranium Energy

Considering the 90-day investment horizon Summit Materials is expected to generate 0.09 times more return on investment than Uranium Energy. However, Summit Materials is 10.59 times less risky than Uranium Energy. It trades about 0.33 of its potential returns per unit of risk. Uranium Energy Corp is currently generating about -0.1 per unit of risk. If you would invest  5,054  in Summit Materials on December 28, 2024 and sell it today you would earn a total of  195.00  from holding Summit Materials or generate 3.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	47.54%
Values	Daily Returns

Summit Materials  vs.  Uranium Energy Corp

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.

Uranium Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uranium Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Summit Materials and Uranium Energy

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

The idea behind Summit Materials and Uranium Energy Corp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.