Correlation Between Summit Materials and INTNED

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

By analyzing existing cross correlation between Summit Materials and INTNED 3875, you can compare the effects of market volatilities on Summit Materials and INTNED 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 INTNED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and INTNED.

Diversification Opportunities for Summit Materials and INTNED

-0.03

Correlation Coefficient

Summit Materials  INTNED

Good diversification

The 3 months correlation between Summit and INTNED is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and INTNED 3875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTNED 3875 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 INTNED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTNED 3875 has no effect on the direction of Summit Materials i.e., Summit Materials and INTNED go up and down completely randomly.

Pair Corralation between Summit Materials and INTNED

Considering the 90-day investment horizon Summit Materials is expected to generate 1.09 times less return on investment than INTNED. But when comparing it to its historical volatility, Summit Materials is 2.34 times less risky than INTNED. It trades about 0.06 of its potential returns per unit of risk. INTNED 3875 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8,114  in INTNED 3875 on September 19, 2024 and sell it today you would earn a total of  319.00  from holding INTNED 3875 or generate 3.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	53.68%
Values	Daily Returns

Summit Materials  vs.  INTNED 3875

Summit Materials

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Summit Materials are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Summit Materials displayed solid returns over the last few months and may actually be approaching a breakup point.

INTNED 3875

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in INTNED 3875 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, INTNED sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Summit Materials and INTNED

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

The idea behind Summit Materials and INTNED 3875 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.