Correlation Between Summit Materials and 26442CAB0

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Can any of the company-specific risk be diversified away by investing in both Summit Materials and 26442CAB0 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 26442CAB0 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and DUKE ENERGY CAROLINAS, you can compare the effects of market volatilities on Summit Materials and 26442CAB0 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 26442CAB0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and 26442CAB0.

Diversification Opportunities for Summit Materials and 26442CAB0

-0.81
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Summit and 26442CAB0 is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and DUKE ENERGY CAROLINAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY CAROLINAS 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 26442CAB0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY CAROLINAS has no effect on the direction of Summit Materials i.e., Summit Materials and 26442CAB0 go up and down completely randomly.

Pair Corralation between Summit Materials and 26442CAB0

Considering the 90-day investment horizon Summit Materials is expected to generate 1.61 times more return on investment than 26442CAB0. However, Summit Materials is 1.61 times more volatile than DUKE ENERGY CAROLINAS. It trades about 0.06 of its potential returns per unit of risk. DUKE ENERGY CAROLINAS is currently generating about 0.0 per unit of risk. If you would invest  3,143  in Summit Materials on October 11, 2024 and sell it today you would earn a total of  2,061  from holding Summit Materials or generate 65.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy72.18%
ValuesDaily Returns

Summit Materials  vs.  DUKE ENERGY CAROLINAS

 Performance 
       Timeline  
Summit Materials 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Summit Materials are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Summit Materials displayed solid returns over the last few months and may actually be approaching a breakup point.
DUKE ENERGY CAROLINAS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days DUKE ENERGY CAROLINAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26442CAB0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Summit Materials and 26442CAB0 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Summit Materials and 26442CAB0

The main advantage of trading using opposite Summit Materials and 26442CAB0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, 26442CAB0 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 26442CAB0 will offset losses from the drop in 26442CAB0's long position.
The idea behind Summit Materials and DUKE ENERGY CAROLINAS 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 Stocks Directory module to find actively traded stocks across global markets.

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