Correlation Between United States and Vulcan Materials
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Vulcan Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Lime and Vulcan Materials, you can compare the effects of market volatilities on United States 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 United States with a short position of Vulcan Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Vulcan Materials.
Diversification Opportunities for United States and Vulcan Materials
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and Vulcan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding United States Lime and Vulcan Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials and United States 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 United States Lime 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 United States i.e., United States and Vulcan Materials go up and down completely randomly.
Pair Corralation between United States and Vulcan Materials
Given the investment horizon of 90 days United States Lime is expected to generate 1.69 times more return on investment than Vulcan Materials. However, United States is 1.69 times more volatile than Vulcan Materials. It trades about 0.23 of its potential returns per unit of risk. Vulcan Materials is currently generating about 0.06 per unit of risk. If you would invest 6,873 in United States Lime on August 24, 2024 and sell it today you would earn a total of 8,160 from holding United States Lime or generate 118.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Lime vs. Vulcan Materials
Performance |
| Timeline |
| United States Lime |
| Vulcan Materials |
United States and Vulcan Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Vulcan Materials
The main advantage of trading using opposite United States and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Smith Midland Corp | United States vs. Holcim | United States vs. Lafargeholcim Ltd ADR | United States vs. Cementos Pacasmayo SAA |
| Vulcan Materials vs. Eagle Materials | Vulcan Materials vs. CRH PLC ADR | Vulcan Materials vs. Summit Materials | Vulcan Materials vs. Cemex SAB de |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world |