Correlation Between Vulcan Materials and Stewart Information
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Stewart Information 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 Stewart Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and Stewart Information Services, you can compare the effects of market volatilities on Vulcan Materials and Stewart Information 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 Stewart Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Stewart Information.
Diversification Opportunities for Vulcan Materials and Stewart Information
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vulcan and Stewart is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and Stewart Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Information 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 Stewart Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Information has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Stewart Information go up and down completely randomly.
Pair Corralation between Vulcan Materials and Stewart Information
Assuming the 90 days horizon Vulcan Materials is expected to under-perform the Stewart Information. But the stock apears to be less risky and, when comparing its historical volatility, Vulcan Materials is 1.45 times less risky than Stewart Information. The stock trades about -0.12 of its potential returns per unit of risk. The Stewart Information Services is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,750 in Stewart Information Services on September 12, 2024 and sell it today you would earn a total of 150.00 from holding Stewart Information Services or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials vs. Stewart Information Services
Performance |
| Timeline |
| Vulcan Materials |
| Stewart Information |
Vulcan Materials and Stewart Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Stewart Information
The main advantage of trading using opposite Vulcan Materials and Stewart Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Stewart Information 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 Stewart Information will offset losses from the drop in Stewart Information'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 |
| Stewart Information vs. National Beverage Corp | Stewart Information vs. Lifeway Foods | Stewart Information vs. Vulcan Materials | Stewart Information vs. NISSIN FOODS HLDGS |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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