Correlation Between Humana and Vulcan Materials
Can any of the company-specific risk be diversified away by investing in both Humana and Vulcan Materials 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 Humana and Vulcan Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humana Inc and Vulcan Materials Co, you can compare the effects of market volatilities on Humana and Vulcan Materials 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 Humana with a short position of Vulcan Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Vulcan Materials.
Diversification Opportunities for Humana and Vulcan Materials
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humana and Vulcan is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Vulcan Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials and Humana 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 Humana Inc are associated (or correlated) with Vulcan Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Materials has no effect on the direction of Humana i.e., Humana and Vulcan Materials go up and down completely randomly.
Pair Corralation between Humana and Vulcan Materials
Assuming the 90 days trading horizon Humana Inc is expected to under-perform the Vulcan Materials. In addition to that, Humana is 2.03 times more volatile than Vulcan Materials Co. It trades about -0.02 of its total potential returns per unit of risk. Vulcan Materials Co is currently generating about 0.18 per unit of volatility. If you would invest 24,900 in Vulcan Materials Co on August 30, 2024 and sell it today you would earn a total of 3,760 from holding Vulcan Materials Co or generate 15.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humana Inc vs. Vulcan Materials Co
Performance |
| Timeline |
| Humana Inc |
| Vulcan Materials |
Humana and Vulcan Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humana and Vulcan Materials
The main advantage of trading using opposite Humana and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Vulcan Materials 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 Vulcan Materials will offset losses from the drop in Vulcan Materials' long position.| Humana vs. Temple Bar Investment | Humana vs. Dunedin Enterprise Investment | Humana vs. Smithson Investment Trust | Humana vs. Mineral Financial Investments |
| Vulcan Materials vs. Aeorema Communications Plc | Vulcan Materials vs. Fortune Brands Home | Vulcan Materials vs. Telecom Italia SpA | Vulcan Materials vs. Martin Marietta Materials |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |