Correlation Between SAMS INTERNAT and Vulcan Materials
Can any of the company-specific risk be diversified away by investing in both SAMS INTERNAT and Vulcan Materials 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 SAMS INTERNAT and Vulcan Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAMS INTERNAT R and Vulcan Materials, you can compare the effects of market volatilities on SAMS INTERNAT and Vulcan Materials 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 SAMS INTERNAT with a short position of Vulcan Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAMS INTERNAT and Vulcan Materials.
Diversification Opportunities for SAMS INTERNAT and Vulcan Materials
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between SAMS and Vulcan is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SAMS INTERNAT R and Vulcan Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials and SAMS INTERNAT 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 SAMS INTERNAT R are associated (or correlated) with Vulcan Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Materials has no effect on the direction of SAMS INTERNAT i.e., SAMS INTERNAT and Vulcan Materials go up and down completely randomly.
Pair Corralation between SAMS INTERNAT and Vulcan Materials
Assuming the 90 days trading horizon SAMS INTERNAT is expected to generate 1.04 times less return on investment than Vulcan Materials. In addition to that, SAMS INTERNAT is 2.23 times more volatile than Vulcan Materials. It trades about 0.02 of its total potential returns per unit of risk. Vulcan Materials is currently generating about 0.06 per unit of volatility. If you would invest 23,706 in Vulcan Materials on August 25, 2024 and sell it today you would earn a total of 2,894 from holding Vulcan Materials or generate 12.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
SAMS INTERNAT R vs. Vulcan Materials
Performance |
| Timeline |
| SAMS INTERNAT R |
| Vulcan Materials |
SAMS INTERNAT and Vulcan Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAMS INTERNAT and Vulcan Materials
The main advantage of trading using opposite SAMS INTERNAT and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAMS INTERNAT position performs unexpectedly, Vulcan Materials 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 Vulcan Materials will offset losses from the drop in Vulcan Materials' long position.| SAMS INTERNAT vs. Vulcan Materials | SAMS INTERNAT vs. Eagle Materials | SAMS INTERNAT vs. Elmos Semiconductor SE | SAMS INTERNAT vs. Magnachip Semiconductor |
| Vulcan Materials vs. Compagnie de Saint Gobain | Vulcan Materials vs. HeidelbergCement AG | Vulcan Materials vs. Superior Plus Corp | Vulcan Materials vs. NMI Holdings |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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