Correlation Between Vulcan Materials and Rheinmetall
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Rheinmetall 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 Rheinmetall 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 Rheinmetall AG, you can compare the effects of market volatilities on Vulcan Materials and Rheinmetall 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 Rheinmetall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Rheinmetall.
Diversification Opportunities for Vulcan Materials and Rheinmetall
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vulcan and Rheinmetall is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials Co and Rheinmetall AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rheinmetall AG 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 Rheinmetall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rheinmetall AG has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Rheinmetall go up and down completely randomly.
Pair Corralation between Vulcan Materials and Rheinmetall
Assuming the 90 days trading horizon Vulcan Materials is expected to generate 6.74 times less return on investment than Rheinmetall. But when comparing it to its historical volatility, Vulcan Materials Co is 1.26 times less risky than Rheinmetall. It trades about 0.03 of its potential returns per unit of risk. Rheinmetall AG is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 49,600 in Rheinmetall AG on October 26, 2024 and sell it today you would earn a total of 23,950 from holding Rheinmetall AG or generate 48.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.43% |
| Values | Daily Returns |
Vulcan Materials Co vs. Rheinmetall AG
Performance |
| Timeline |
| Vulcan Materials |
| Rheinmetall AG |
Vulcan Materials and Rheinmetall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Rheinmetall
The main advantage of trading using opposite Vulcan Materials and Rheinmetall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Rheinmetall 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 Rheinmetall will offset losses from the drop in Rheinmetall's long position.| Vulcan Materials vs. Berkshire Hathaway | Vulcan Materials vs. Samsung Electronics Co | Vulcan Materials vs. Samsung Electronics Co | Vulcan Materials vs. Chocoladefabriken Lindt Spruengli |
| Rheinmetall vs. GreenX Metals | Rheinmetall vs. Vulcan Materials Co | Rheinmetall vs. Summit Materials Cl | Rheinmetall vs. Compagnie Plastic Omnium |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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