Correlation Between Vulcan Materials and Interactive Brokers
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Interactive Brokers 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 Interactive Brokers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and Interactive Brokers Group, you can compare the effects of market volatilities on Vulcan Materials and Interactive Brokers 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 Interactive Brokers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Interactive Brokers.
Diversification Opportunities for Vulcan Materials and Interactive Brokers
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vulcan and Interactive is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and Interactive Brokers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Brokers 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 Interactive Brokers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Brokers has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Interactive Brokers go up and down completely randomly.
Pair Corralation between Vulcan Materials and Interactive Brokers
Considering the 90-day investment horizon Vulcan Materials is expected to generate 2.58 times less return on investment than Interactive Brokers. But when comparing it to its historical volatility, Vulcan Materials is 2.42 times less risky than Interactive Brokers. It trades about 0.27 of its potential returns per unit of risk. Interactive Brokers Group is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 18,250 in Interactive Brokers Group on November 3, 2024 and sell it today you would earn a total of 3,494 from holding Interactive Brokers Group or generate 19.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials vs. Interactive Brokers Group
Performance |
| Timeline |
| Vulcan Materials |
| Interactive Brokers |
Vulcan Materials and Interactive Brokers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Interactive Brokers
The main advantage of trading using opposite Vulcan Materials and Interactive Brokers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Interactive Brokers 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 Interactive Brokers will offset losses from the drop in Interactive Brokers' long position.| Vulcan Materials vs. Eagle Materials | Vulcan Materials vs. CRH PLC ADR | Vulcan Materials vs. Summit Materials | Vulcan Materials vs. Cemex SAB de |
| Interactive Brokers vs. BorgWarner | Interactive Brokers vs. Anterix | Interactive Brokers vs. Sphere Entertainment Co | Interactive Brokers vs. Radcom |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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