Correlation Between Vulcan Materials and United States
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and United States Lime, you can compare the effects of market volatilities on Vulcan Materials and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and United States.
Diversification Opportunities for Vulcan Materials and United States
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vulcan and United is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and United States Lime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Lime 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Lime has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and United States go up and down completely randomly.
Pair Corralation between Vulcan Materials and United States
Considering the 90-day investment horizon Vulcan Materials is expected to generate 11.78 times less return on investment than United States. But when comparing it to its historical volatility, Vulcan Materials is 1.68 times less risky than United States. It trades about 0.03 of its potential returns per unit of risk. United States Lime is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 5,091 in United States Lime on August 27, 2024 and sell it today you would earn a total of 9,882 from holding United States Lime or generate 194.11% 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. United States Lime
Performance |
| Timeline |
| Vulcan Materials |
| United States Lime |
Vulcan Materials and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and United States
The main advantage of trading using opposite Vulcan Materials and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Vulcan Materials vs. Holcim | Vulcan Materials vs. Lafargeholcim Ltd ADR | Vulcan Materials vs. Eagle Materials |
| United States vs. Smith Midland Corp | United States vs. Holcim | United States vs. Lafargeholcim Ltd ADR | United States vs. Cementos Pacasmayo SAA |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |