Correlation Between Summit Environmental and Avistar Communications

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

By analyzing existing cross correlation between Summit Environmental and Avistar Communications Corp, you can compare the effects of market volatilities on Summit Environmental and Avistar Communications 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 Environmental with a short position of Avistar Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Environmental and Avistar Communications.

Diversification Opportunities for Summit Environmental and Avistar Communications

1.0

Correlation Coefficient

Summit Environmental  Avistar Communications

No risk reduction

The 3 months correlation between Summit and Avistar is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Summit Environmental and Avistar Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avistar Communications and Summit Environmental 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 Environmental are associated (or correlated) with Avistar Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avistar Communications has no effect on the direction of Summit Environmental i.e., Summit Environmental and Avistar Communications go up and down completely randomly.

Pair Corralation between Summit Environmental and Avistar Communications

If you would invest  0.01  in Avistar Communications Corp on September 12, 2025 and sell it today you would earn a total of  0.00  from holding Avistar Communications Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	97.67%
Values	Daily Returns

Summit Environmental  vs.  Avistar Communications Corp

Summit Environmental

Risk-Adjusted Performance

Weakest

Over the last 90 days Summit Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Summit Environmental is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Avistar Communications

Risk-Adjusted Performance

Weakest

Over the last 90 days Avistar Communications Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Avistar Communications is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Summit Environmental and Avistar Communications

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

The idea behind Summit Environmental and Avistar Communications 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.