Correlation Between Vulcan Materials and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Sealed Air 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 Sealed Air 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 Sealed Air Corp, you can compare the effects of market volatilities on Vulcan Materials and Sealed Air 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 Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Sealed Air.
Diversification Opportunities for Vulcan Materials and Sealed Air
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vulcan and Sealed is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials Co and Sealed Air Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air Corp 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 Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air Corp has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Sealed Air go up and down completely randomly.
Pair Corralation between Vulcan Materials and Sealed Air
Assuming the 90 days trading horizon Vulcan Materials Co is expected to generate 0.68 times more return on investment than Sealed Air. However, Vulcan Materials Co is 1.48 times less risky than Sealed Air. It trades about 0.07 of its potential returns per unit of risk. Sealed Air Corp is currently generating about -0.02 per unit of risk. If you would invest 17,623 in Vulcan Materials Co on August 28, 2024 and sell it today you would earn a total of 11,410 from holding Vulcan Materials Co or generate 64.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 87.29% |
| Values | Daily Returns |
Vulcan Materials Co vs. Sealed Air Corp
Performance |
| Timeline |
| Vulcan Materials |
| Sealed Air Corp |
Vulcan Materials and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Sealed Air
The main advantage of trading using opposite Vulcan Materials and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.| Vulcan Materials vs. Samsung Electronics Co | Vulcan Materials vs. Samsung Electronics Co | Vulcan Materials vs. Hyundai Motor | Vulcan Materials vs. Toyota Motor Corp |
| Sealed Air vs. Samsung Electronics Co | Sealed Air vs. Samsung Electronics Co | Sealed Air vs. Hyundai Motor | Sealed Air vs. Toyota Motor 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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