Correlation Between VULCAN MATERIALS and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both VULCAN MATERIALS and Zurich Insurance 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 Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VULCAN MATERIALS and Zurich Insurance Group, you can compare the effects of market volatilities on VULCAN MATERIALS and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of VULCAN MATERIALS and Zurich Insurance.
Diversification Opportunities for VULCAN MATERIALS and Zurich Insurance
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VULCAN and Zurich is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of VULCAN MATERIALS i.e., VULCAN MATERIALS and Zurich Insurance go up and down completely randomly.
Pair Corralation between VULCAN MATERIALS and Zurich Insurance
Assuming the 90 days trading horizon VULCAN MATERIALS is expected to generate 0.62 times more return on investment than Zurich Insurance. However, VULCAN MATERIALS is 1.61 times less risky than Zurich Insurance. It trades about 0.18 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about -0.07 per unit of risk. If you would invest 25,200 in VULCAN MATERIALS on October 24, 2024 and sell it today you would earn a total of 1,000.00 from holding VULCAN MATERIALS or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VULCAN MATERIALS vs. Zurich Insurance Group
Performance |
| Timeline |
| VULCAN MATERIALS |
| Zurich Insurance |
VULCAN MATERIALS and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VULCAN MATERIALS and Zurich Insurance
The main advantage of trading using opposite VULCAN MATERIALS and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.| VULCAN MATERIALS vs. DATADOT TECHNOLOGY | VULCAN MATERIALS vs. TERADATA | VULCAN MATERIALS vs. Hyrican Informationssysteme Aktiengesellschaft | VULCAN MATERIALS vs. Apollo Medical Holdings |
| Zurich Insurance vs. GAMESTOP | Zurich Insurance vs. VULCAN MATERIALS | Zurich Insurance vs. Rayonier Advanced Materials | Zurich Insurance vs. Games Workshop Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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