Correlation Between VULCAN MATERIALS and SBI Holdings
Can any of the company-specific risk be diversified away by investing in both VULCAN MATERIALS and SBI Holdings 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 SBI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VULCAN MATERIALS and SBI Holdings, you can compare the effects of market volatilities on VULCAN MATERIALS and SBI Holdings 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 SBI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of VULCAN MATERIALS and SBI Holdings.
Diversification Opportunities for VULCAN MATERIALS and SBI Holdings
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VULCAN and SBI is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and SBI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Holdings 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 SBI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Holdings has no effect on the direction of VULCAN MATERIALS i.e., VULCAN MATERIALS and SBI Holdings go up and down completely randomly.
Pair Corralation between VULCAN MATERIALS and SBI Holdings
Assuming the 90 days trading horizon VULCAN MATERIALS is expected to under-perform the SBI Holdings. But the stock apears to be less risky and, when comparing its historical volatility, VULCAN MATERIALS is 1.57 times less risky than SBI Holdings. The stock trades about -0.51 of its potential returns per unit of risk. The SBI Holdings is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 2,460 in SBI Holdings on October 12, 2024 and sell it today you would lose (60.00) from holding SBI Holdings or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VULCAN MATERIALS vs. SBI Holdings
Performance |
| Timeline |
| VULCAN MATERIALS |
| SBI Holdings |
VULCAN MATERIALS and SBI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VULCAN MATERIALS and SBI Holdings
The main advantage of trading using opposite VULCAN MATERIALS and SBI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS position performs unexpectedly, SBI Holdings 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 SBI Holdings will offset losses from the drop in SBI Holdings' long position.| VULCAN MATERIALS vs. TERADATA | VULCAN MATERIALS vs. Cogent Communications Holdings | VULCAN MATERIALS vs. Cass Information Systems | VULCAN MATERIALS vs. Charter Communications |
| SBI Holdings vs. VULCAN MATERIALS | SBI Holdings vs. ANGANG STEEL H | SBI Holdings vs. CALTAGIRONE EDITORE | SBI Holdings vs. Mitsubishi Materials |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |