Correlation Between Vulcan Materials and ALLIANZ SE
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and ALLIANZ SE 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 ALLIANZ SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and ALLIANZ SE UNSPADR, you can compare the effects of market volatilities on Vulcan Materials and ALLIANZ SE 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 ALLIANZ SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and ALLIANZ SE.
Diversification Opportunities for Vulcan Materials and ALLIANZ SE
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vulcan and ALLIANZ is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and ALLIANZ SE UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLIANZ SE UNSPADR 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 ALLIANZ SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLIANZ SE UNSPADR has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and ALLIANZ SE go up and down completely randomly.
Pair Corralation between Vulcan Materials and ALLIANZ SE
Assuming the 90 days horizon Vulcan Materials is expected to under-perform the ALLIANZ SE. But the stock apears to be less risky and, when comparing its historical volatility, Vulcan Materials is 1.47 times less risky than ALLIANZ SE. The stock trades about -0.18 of its potential returns per unit of risk. The ALLIANZ SE UNSPADR is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,860 in ALLIANZ SE UNSPADR on September 12, 2024 and sell it today you would earn a total of 160.00 from holding ALLIANZ SE UNSPADR or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Vulcan Materials vs. ALLIANZ SE UNSPADR
Performance |
| Timeline |
| Vulcan Materials |
| ALLIANZ SE UNSPADR |
Vulcan Materials and ALLIANZ SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and ALLIANZ SE
The main advantage of trading using opposite Vulcan Materials and ALLIANZ SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, ALLIANZ SE 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 ALLIANZ SE will offset losses from the drop in ALLIANZ SE's long position.| Vulcan Materials vs. Heidelberg Materials AG | Vulcan Materials vs. Superior Plus Corp | Vulcan Materials vs. NMI Holdings | Vulcan Materials vs. SIVERS SEMICONDUCTORS AB |
| ALLIANZ SE vs. Superior Plus Corp | ALLIANZ SE vs. SIVERS SEMICONDUCTORS AB | ALLIANZ SE vs. CHINA HUARONG ENERHD 50 | ALLIANZ SE vs. NORDIC HALIBUT AS |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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