Correlation Between Vulcan Materials and Dassault Aviation
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Dassault Aviation 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 Vulcan Materials and Dassault Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials Co and Dassault Aviation SA, you can compare the effects of market volatilities on Vulcan Materials and Dassault Aviation 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 Vulcan Materials with a short position of Dassault Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Dassault Aviation.
Diversification Opportunities for Vulcan Materials and Dassault Aviation
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vulcan and Dassault is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials Co and Dassault Aviation SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Aviation and Vulcan 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 Vulcan Materials Co are associated (or correlated) with Dassault Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Aviation has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Dassault Aviation go up and down completely randomly.
Pair Corralation between Vulcan Materials and Dassault Aviation
Assuming the 90 days trading horizon Vulcan Materials Co is expected to generate 1.09 times more return on investment than Dassault Aviation. However, Vulcan Materials is 1.09 times more volatile than Dassault Aviation SA. It trades about 0.18 of its potential returns per unit of risk. Dassault Aviation SA is currently generating about 0.05 per unit of risk. If you would invest 26,896 in Vulcan Materials Co on September 3, 2024 and sell it today you would earn a total of 1,890 from holding Vulcan Materials Co or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials Co vs. Dassault Aviation SA
Performance |
| Timeline |
| Vulcan Materials |
| Dassault Aviation |
Vulcan Materials and Dassault Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Dassault Aviation
The main advantage of trading using opposite Vulcan Materials and Dassault Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Dassault Aviation 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 Dassault Aviation will offset losses from the drop in Dassault Aviation's long position.| Vulcan Materials vs. Catalyst Media Group | Vulcan Materials vs. CATLIN GROUP | Vulcan Materials vs. Magnora ASA | Vulcan Materials vs. RTW Venture Fund |
| Dassault Aviation vs. Induction Healthcare Group | Dassault Aviation vs. Spire Healthcare Group | Dassault Aviation vs. Vulcan Materials Co | Dassault Aviation vs. CVS Health Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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