Correlation Between VULCAN MATERIALS and SLR Investment
Can any of the company-specific risk be diversified away by investing in both VULCAN MATERIALS and SLR Investment 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 SLR Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VULCAN MATERIALS and SLR Investment Corp, you can compare the effects of market volatilities on VULCAN MATERIALS and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of VULCAN MATERIALS and SLR Investment.
Diversification Opportunities for VULCAN MATERIALS and SLR Investment
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VULCAN and SLR is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of VULCAN MATERIALS i.e., VULCAN MATERIALS and SLR Investment go up and down completely randomly.
Pair Corralation between VULCAN MATERIALS and SLR Investment
Assuming the 90 days trading horizon VULCAN MATERIALS is expected to under-perform the SLR Investment. But the stock apears to be less risky and, when comparing its historical volatility, VULCAN MATERIALS is 1.55 times less risky than SLR Investment. The stock trades about -0.07 of its potential returns per unit of risk. The SLR Investment Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,530 in SLR Investment Corp on September 12, 2024 and sell it today you would earn a total of 48.00 from holding SLR Investment Corp or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VULCAN MATERIALS vs. SLR Investment Corp
Performance |
| Timeline |
| VULCAN MATERIALS |
| SLR Investment Corp |
VULCAN MATERIALS and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VULCAN MATERIALS and SLR Investment
The main advantage of trading using opposite VULCAN MATERIALS and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| VULCAN MATERIALS vs. Apple Inc | VULCAN MATERIALS vs. Apple Inc | VULCAN MATERIALS vs. Apple Inc | VULCAN MATERIALS vs. Apple Inc |
| SLR Investment vs. Ameriprise Financial | SLR Investment vs. Ares Management Corp | SLR Investment vs. Superior Plus Corp | SLR Investment vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |