Correlation Between Glaston Oyj and Vulcan Materials
Can any of the company-specific risk be diversified away by investing in both Glaston Oyj 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 Glaston Oyj and Vulcan Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glaston Oyj Abp and Vulcan Materials, you can compare the effects of market volatilities on Glaston Oyj 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 Glaston Oyj with a short position of Vulcan Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glaston Oyj and Vulcan Materials.
Diversification Opportunities for Glaston Oyj and Vulcan Materials
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Glaston and Vulcan is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Glaston Oyj Abp and Vulcan Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials and Glaston Oyj 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 Glaston Oyj Abp 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 Glaston Oyj i.e., Glaston Oyj and Vulcan Materials go up and down completely randomly.
Pair Corralation between Glaston Oyj and Vulcan Materials
Assuming the 90 days trading horizon Glaston Oyj Abp is expected to under-perform the Vulcan Materials. In addition to that, Glaston Oyj is 1.42 times more volatile than Vulcan Materials. It trades about 0.0 of its total potential returns per unit of risk. Vulcan Materials is currently generating about 0.07 per unit of volatility. If you would invest 16,570 in Vulcan Materials on August 28, 2024 and sell it today you would earn a total of 10,430 from holding Vulcan Materials or generate 62.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glaston Oyj Abp vs. Vulcan Materials
Performance |
| Timeline |
| Glaston Oyj Abp |
| Vulcan Materials |
Glaston Oyj and Vulcan Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glaston Oyj and Vulcan Materials
The main advantage of trading using opposite Glaston Oyj and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glaston Oyj 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.| Glaston Oyj vs. Superior Plus Corp | Glaston Oyj vs. NMI Holdings | Glaston Oyj vs. Origin Agritech | Glaston Oyj vs. SIVERS SEMICONDUCTORS AB |
| Vulcan Materials vs. HeidelbergCement AG | Vulcan Materials vs. Superior Plus Corp | Vulcan Materials vs. NMI Holdings | Vulcan Materials vs. Origin Agritech |
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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