Correlation Between Vulcan Materials and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Addus HomeCare 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 Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and Addus HomeCare, you can compare the effects of market volatilities on Vulcan Materials and Addus HomeCare 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 Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Addus HomeCare.
Diversification Opportunities for Vulcan Materials and Addus HomeCare
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vulcan and Addus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare 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 Addus HomeCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addus HomeCare has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Addus HomeCare go up and down completely randomly.
Pair Corralation between Vulcan Materials and Addus HomeCare
Considering the 90-day investment horizon Vulcan Materials is expected to under-perform the Addus HomeCare. But the stock apears to be less risky and, when comparing its historical volatility, Vulcan Materials is 1.3 times less risky than Addus HomeCare. The stock trades about -0.51 of its potential returns per unit of risk. The Addus HomeCare is currently generating about -0.33 of returns per unit of risk over similar time horizon. If you would invest 11,610 in Addus HomeCare on December 9, 2024 and sell it today you would lose (1,907) from holding Addus HomeCare or give up 16.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials vs. Addus HomeCare
Performance |
| Timeline |
| Vulcan Materials |
| Addus HomeCare |
Vulcan Materials and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Addus HomeCare
The main advantage of trading using opposite Vulcan Materials and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Addus HomeCare 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 Addus HomeCare will offset losses from the drop in Addus HomeCare's long position.| Vulcan Materials vs. Eagle Materials | ||
| Vulcan Materials vs. CRH PLC ADR | ||
| Vulcan Materials vs. Cemex SAB de | ||
| Vulcan Materials vs. Martin Marietta Materials |
| Addus HomeCare vs. Encompass Health Corp | ||
| Addus HomeCare vs. Pennant Group | ||
| Addus HomeCare vs. Acadia Healthcare | ||
| Addus HomeCare vs. Select Medical Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |