Correlation Between VULCAN MATERIALS and Bechtle AG
Can any of the company-specific risk be diversified away by investing in both VULCAN MATERIALS and Bechtle AG 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 Bechtle AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VULCAN MATERIALS and Bechtle AG, you can compare the effects of market volatilities on VULCAN MATERIALS and Bechtle AG 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 Bechtle AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of VULCAN MATERIALS and Bechtle AG.
Diversification Opportunities for VULCAN MATERIALS and Bechtle AG
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between VULCAN and Bechtle is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and Bechtle AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bechtle AG 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 Bechtle AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bechtle AG has no effect on the direction of VULCAN MATERIALS i.e., VULCAN MATERIALS and Bechtle AG go up and down completely randomly.
Pair Corralation between VULCAN MATERIALS and Bechtle AG
Assuming the 90 days trading horizon VULCAN MATERIALS is expected to under-perform the Bechtle AG. But the stock apears to be less risky and, when comparing its historical volatility, VULCAN MATERIALS is 1.27 times less risky than Bechtle AG. The stock trades about -0.32 of its potential returns per unit of risk. The Bechtle AG is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,162 in Bechtle AG on December 3, 2024 and sell it today you would earn a total of 126.00 from holding Bechtle AG or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VULCAN MATERIALS vs. Bechtle AG
Performance |
| Timeline |
| VULCAN MATERIALS |
| Bechtle AG |
VULCAN MATERIALS and Bechtle AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VULCAN MATERIALS and Bechtle AG
The main advantage of trading using opposite VULCAN MATERIALS and Bechtle AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS position performs unexpectedly, Bechtle AG 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 Bechtle AG will offset losses from the drop in Bechtle AG's long position.| VULCAN MATERIALS vs. Take Two Interactive Software | VULCAN MATERIALS vs. ATOSS SOFTWARE | VULCAN MATERIALS vs. X FAB Silicon Foundries | VULCAN MATERIALS vs. International Consolidated Airlines |
| Bechtle AG vs. MHP Hotel AG | Bechtle AG vs. WESANA HEALTH HOLD | Bechtle AG vs. UNIDOC HEALTH P | Bechtle AG vs. NIGHTINGALE HEALTH EO |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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