Correlation Between Vulcan Materials and Medical Properties
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Medical Properties 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 Medical Properties 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 Medical Properties Trust, you can compare the effects of market volatilities on Vulcan Materials and Medical Properties 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 Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Medical Properties.
Diversification Opportunities for Vulcan Materials and Medical Properties
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vulcan and Medical is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials Co and Medical Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Properties Trust 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 Medical Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Properties Trust has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Medical Properties go up and down completely randomly.
Pair Corralation between Vulcan Materials and Medical Properties
Assuming the 90 days trading horizon Vulcan Materials Co is expected to generate 0.45 times more return on investment than Medical Properties. However, Vulcan Materials Co is 2.24 times less risky than Medical Properties. It trades about 0.15 of its potential returns per unit of risk. Medical Properties Trust is currently generating about 0.01 per unit of risk. If you would invest 24,457 in Vulcan Materials Co on September 2, 2024 and sell it today you would earn a total of 4,329 from holding Vulcan Materials Co or generate 17.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials Co vs. Medical Properties Trust
Performance |
| Timeline |
| Vulcan Materials |
| Medical Properties Trust |
Vulcan Materials and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Medical Properties
The main advantage of trading using opposite Vulcan Materials and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Medical Properties 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 Medical Properties will offset losses from the drop in Medical Properties' long position.| Vulcan Materials vs. Uniper SE | Vulcan Materials vs. Mulberry Group PLC | Vulcan Materials vs. London Security Plc | Vulcan Materials vs. Triad Group PLC |
| Medical Properties vs. Uniper SE | Medical Properties vs. Mulberry Group PLC | Medical Properties vs. London Security Plc | Medical Properties vs. Triad Group PLC |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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