Correlation Between Vulcan Materials and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Safety Insurance 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 Safety Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and Safety Insurance Group, you can compare the effects of market volatilities on Vulcan Materials and Safety Insurance 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 Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Safety Insurance.
Diversification Opportunities for Vulcan Materials and Safety Insurance
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vulcan and Safety is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance 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 Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Safety Insurance go up and down completely randomly.
Pair Corralation between Vulcan Materials and Safety Insurance
Assuming the 90 days horizon Vulcan Materials is expected to generate 1.42 times more return on investment than Safety Insurance. However, Vulcan Materials is 1.42 times more volatile than Safety Insurance Group. It trades about 0.01 of its potential returns per unit of risk. Safety Insurance Group is currently generating about -0.07 per unit of risk. If you would invest 20,600 in Vulcan Materials on January 12, 2025 and sell it today you would earn a total of 0.00 from holding Vulcan Materials or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials vs. Safety Insurance Group
Performance |
| Timeline |
| Vulcan Materials |
| Safety Insurance |
Vulcan Materials and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Safety Insurance
The main advantage of trading using opposite Vulcan Materials and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Safety Insurance 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| Vulcan Materials vs. Daikin IndustriesLtd | Vulcan Materials vs. Compagnie de Saint Gobain | Vulcan Materials vs. Anhui Conch Cement | Vulcan Materials vs. Martin Marietta Materials |
| Safety Insurance vs. AFFLUENT MEDICAL SAS | Safety Insurance vs. Plastic Omnium | Safety Insurance vs. Geratherm Medical AG | Safety Insurance vs. Advanced Medical Solutions |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |