Correlation Between Vulcan Materials and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Coca Cola 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 Coca Cola 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 Coca Cola Co, you can compare the effects of market volatilities on Vulcan Materials and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Coca Cola.
Diversification Opportunities for Vulcan Materials and Coca Cola
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vulcan and Coca is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials Co and Coca Cola Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Coca Cola go up and down completely randomly.
Pair Corralation between Vulcan Materials and Coca Cola
Assuming the 90 days trading horizon Vulcan Materials Co is expected to generate 1.76 times more return on investment than Coca Cola. However, Vulcan Materials is 1.76 times more volatile than Coca Cola Co. It trades about 0.07 of its potential returns per unit of risk. Coca Cola Co is currently generating about 0.05 per unit of risk. If you would invest 22,271 in Vulcan Materials Co on September 14, 2024 and sell it today you would earn a total of 5,563 from holding Vulcan Materials Co or generate 24.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Vulcan Materials Co vs. Coca Cola Co
Performance |
| Timeline |
| Vulcan Materials |
| Coca Cola |
Vulcan Materials and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Coca Cola
The main advantage of trading using opposite Vulcan Materials and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Vulcan Materials vs. Albion Technology General | Vulcan Materials vs. Gamma Communications PLC | Vulcan Materials vs. SMA Solar Technology | Vulcan Materials vs. DXC Technology Co |
| Coca Cola vs. Regions Financial Corp | Coca Cola vs. American Homes 4 | Coca Cola vs. Fortune Brands Home | Coca Cola vs. Sparebank 1 SR |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stocks Directory Find actively traded stocks across global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |