Correlation Between VULCAN MATERIALS and Chuangs China
Can any of the company-specific risk be diversified away by investing in both VULCAN MATERIALS and Chuangs China 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 Chuangs China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VULCAN MATERIALS and Chuangs China Investments, you can compare the effects of market volatilities on VULCAN MATERIALS and Chuangs China 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 Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of VULCAN MATERIALS and Chuangs China.
Diversification Opportunities for VULCAN MATERIALS and Chuangs China
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between VULCAN and Chuangs is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments 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 Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of VULCAN MATERIALS i.e., VULCAN MATERIALS and Chuangs China go up and down completely randomly.
Pair Corralation between VULCAN MATERIALS and Chuangs China
If you would invest 24,600 in VULCAN MATERIALS on September 4, 2024 and sell it today you would earn a total of 2,600 from holding VULCAN MATERIALS or generate 10.57% 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. Chuangs China Investments
Performance |
| Timeline |
| VULCAN MATERIALS |
| Chuangs China Investments |
VULCAN MATERIALS and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VULCAN MATERIALS and Chuangs China
The main advantage of trading using opposite VULCAN MATERIALS and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| VULCAN MATERIALS vs. Apple Inc | VULCAN MATERIALS vs. Apple Inc | VULCAN MATERIALS vs. Apple Inc | VULCAN MATERIALS vs. Apple Inc |
| Chuangs China vs. Hongkong Land Holdings | Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings | Chuangs China vs. Origin Agritech |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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