Correlation Between Vulcan Materials and Berkshire Hills
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Berkshire Hills 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 Berkshire Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and Berkshire Hills Bancorp, you can compare the effects of market volatilities on Vulcan Materials and Berkshire Hills 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 Berkshire Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Berkshire Hills.
Diversification Opportunities for Vulcan Materials and Berkshire Hills
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vulcan and Berkshire is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and Berkshire Hills Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hills Bancorp 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 are associated (or correlated) with Berkshire Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hills Bancorp has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Berkshire Hills go up and down completely randomly.
Pair Corralation between Vulcan Materials and Berkshire Hills
Assuming the 90 days horizon Vulcan Materials is expected to generate 1.17 times more return on investment than Berkshire Hills. However, Vulcan Materials is 1.17 times more volatile than Berkshire Hills Bancorp. It trades about 0.2 of its potential returns per unit of risk. Berkshire Hills Bancorp is currently generating about 0.18 per unit of risk. If you would invest 25,000 in Vulcan Materials on October 20, 2024 and sell it today you would earn a total of 1,200 from holding Vulcan Materials or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials vs. Berkshire Hills Bancorp
Performance |
| Timeline |
| Vulcan Materials |
| Berkshire Hills Bancorp |
Vulcan Materials and Berkshire Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Berkshire Hills
The main advantage of trading using opposite Vulcan Materials and Berkshire Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Berkshire Hills 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 Berkshire Hills will offset losses from the drop in Berkshire Hills' long position.| Vulcan Materials vs. DAIRY FARM INTL | Vulcan Materials vs. Hitachi Construction Machinery | Vulcan Materials vs. Daito Trust Construction | Vulcan Materials vs. China Resources Beer |
| Berkshire Hills vs. POSBO UNSPADRS20YC1 | Berkshire Hills vs. Postal Savings Bank | Berkshire Hills vs. Truist Financial | Berkshire Hills vs. OVERSEA CHINUNSPADR2 |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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