Correlation Between Summit Materials and Vivic Corp

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

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

Diversification Opportunities for Summit Materials and Vivic Corp

-0.3

Correlation Coefficient

Summit Materials  Vivic Corp

Very good diversification

The 3 months correlation between Summit and Vivic is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Vivic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivic 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 Vivic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivic Corp has no effect on the direction of Summit Materials i.e., Summit Materials and Vivic Corp go up and down completely randomly.

Pair Corralation between Summit Materials and Vivic Corp

Considering the 90-day investment horizon Summit Materials is expected to under-perform the Vivic Corp. But the stock apears to be less risky and, when comparing its historical volatility, Summit Materials is 60.84 times less risky than Vivic Corp. The stock trades about -0.19 of its potential returns per unit of risk. The Vivic Corp is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  179.00  in Vivic Corp on September 28, 2024 and sell it today you would earn a total of  221.00  from holding Vivic Corp or generate 123.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Summit Materials  vs.  Vivic Corp

Summit Materials

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Summit Materials are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Summit Materials displayed solid returns over the last few months and may actually be approaching a breakup point.

Vivic Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vivic Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Vivic Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Summit Materials and Vivic Corp

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

The idea behind Summit Materials and Vivic 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.