Correlation Between VULCAN MATERIALS and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both VULCAN MATERIALS and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VULCAN MATERIALS and KINGBOARD CHEMICAL, you can compare the effects of market volatilities on VULCAN MATERIALS and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of VULCAN MATERIALS and KINGBOARD CHEMICAL.
Diversification Opportunities for VULCAN MATERIALS and KINGBOARD CHEMICAL
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VULCAN and KINGBOARD is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of VULCAN MATERIALS i.e., VULCAN MATERIALS and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between VULCAN MATERIALS and KINGBOARD CHEMICAL
Assuming the 90 days trading horizon VULCAN MATERIALS is expected to generate 2.21 times less return on investment than KINGBOARD CHEMICAL. But when comparing it to its historical volatility, VULCAN MATERIALS is 2.0 times less risky than KINGBOARD CHEMICAL. It trades about 0.07 of its potential returns per unit of risk. KINGBOARD CHEMICAL is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 144.00 in KINGBOARD CHEMICAL on November 9, 2024 and sell it today you would earn a total of 106.00 from holding KINGBOARD CHEMICAL or generate 73.61% 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. KINGBOARD CHEMICAL
Performance |
| Timeline |
| VULCAN MATERIALS |
| KINGBOARD CHEMICAL |
VULCAN MATERIALS and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VULCAN MATERIALS and KINGBOARD CHEMICAL
The main advantage of trading using opposite VULCAN MATERIALS and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL's long position.| VULCAN MATERIALS vs. ASPEN TECHINC DL | VULCAN MATERIALS vs. Uber Technologies | VULCAN MATERIALS vs. YATRA ONLINE DL 0001 | VULCAN MATERIALS vs. Addtech AB |
| KINGBOARD CHEMICAL vs. SILICON LABORATOR | KINGBOARD CHEMICAL vs. PKSHA TECHNOLOGY INC | KINGBOARD CHEMICAL vs. Casio Computer CoLtd | KINGBOARD CHEMICAL vs. X FAB Silicon Foundries |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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