Correlation Between VULCAN MATERIALS and Aflac Incorporated
Can any of the company-specific risk be diversified away by investing in both VULCAN MATERIALS and Aflac Incorporated 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 Aflac Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VULCAN MATERIALS and Aflac Incorporated, you can compare the effects of market volatilities on VULCAN MATERIALS and Aflac Incorporated 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 Aflac Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of VULCAN MATERIALS and Aflac Incorporated.
Diversification Opportunities for VULCAN MATERIALS and Aflac Incorporated
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VULCAN and Aflac is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and Aflac Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aflac Incorporated 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 Aflac Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aflac Incorporated has no effect on the direction of VULCAN MATERIALS i.e., VULCAN MATERIALS and Aflac Incorporated go up and down completely randomly.
Pair Corralation between VULCAN MATERIALS and Aflac Incorporated
Assuming the 90 days trading horizon VULCAN MATERIALS is expected to generate 1.13 times more return on investment than Aflac Incorporated. However, VULCAN MATERIALS is 1.13 times more volatile than Aflac Incorporated. It trades about 0.25 of its potential returns per unit of risk. Aflac Incorporated is currently generating about 0.17 per unit of risk. If you would invest 24,800 in VULCAN MATERIALS on November 4, 2024 and sell it today you would earn a total of 1,600 from holding VULCAN MATERIALS or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
VULCAN MATERIALS vs. Aflac Incorporated
Performance |
| Timeline |
| VULCAN MATERIALS |
| Aflac Incorporated |
VULCAN MATERIALS and Aflac Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VULCAN MATERIALS and Aflac Incorporated
The main advantage of trading using opposite VULCAN MATERIALS and Aflac Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS position performs unexpectedly, Aflac Incorporated 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 Aflac Incorporated will offset losses from the drop in Aflac Incorporated's long position.| VULCAN MATERIALS vs. MAVEN WIRELESS SWEDEN | VULCAN MATERIALS vs. Zoom Video Communications | VULCAN MATERIALS vs. HUTCHISON TELECOMM | VULCAN MATERIALS vs. SK TELECOM TDADR |
| Aflac Incorporated vs. QINGCI GAMES INC | Aflac Incorporated vs. DALATA HOTEL | Aflac Incorporated vs. PLAYMATES TOYS | Aflac Incorporated vs. BAKED GAMES SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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