Correlation Between VULCAN MATERIALS and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both VULCAN MATERIALS and MEDICAL FACILITIES 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 MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VULCAN MATERIALS and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on VULCAN MATERIALS and MEDICAL FACILITIES 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 MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of VULCAN MATERIALS and MEDICAL FACILITIES.
Diversification Opportunities for VULCAN MATERIALS and MEDICAL FACILITIES
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VULCAN and MEDICAL is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of VULCAN MATERIALS i.e., VULCAN MATERIALS and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between VULCAN MATERIALS and MEDICAL FACILITIES
Assuming the 90 days trading horizon VULCAN MATERIALS is expected to under-perform the MEDICAL FACILITIES. But the stock apears to be less risky and, when comparing its historical volatility, VULCAN MATERIALS is 1.21 times less risky than MEDICAL FACILITIES. The stock trades about -0.25 of its potential returns per unit of risk. The MEDICAL FACILITIES NEW is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,071 in MEDICAL FACILITIES NEW on October 16, 2024 and sell it today you would lose (11.00) from holding MEDICAL FACILITIES NEW or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
VULCAN MATERIALS vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| VULCAN MATERIALS |
| MEDICAL FACILITIES NEW |
VULCAN MATERIALS and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VULCAN MATERIALS and MEDICAL FACILITIES
The main advantage of trading using opposite VULCAN MATERIALS and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| VULCAN MATERIALS vs. AOYAMA TRADING | VULCAN MATERIALS vs. CarsalesCom | VULCAN MATERIALS vs. CDL INVESTMENT | VULCAN MATERIALS vs. Japan Asia Investment |
| MEDICAL FACILITIES vs. Global Ship Lease | MEDICAL FACILITIES vs. ECHO INVESTMENT ZY | MEDICAL FACILITIES vs. MidCap Financial Investment | MEDICAL FACILITIES vs. SLR Investment Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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