Correlation Between Vulcan Steel and Immuron
Can any of the company-specific risk be diversified away by investing in both Vulcan Steel and Immuron 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 Steel and Immuron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Steel and Immuron, you can compare the effects of market volatilities on Vulcan Steel and Immuron 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 Steel with a short position of Immuron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Steel and Immuron.
Diversification Opportunities for Vulcan Steel and Immuron
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vulcan and Immuron is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Steel and Immuron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immuron and Vulcan Steel 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 Steel are associated (or correlated) with Immuron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immuron has no effect on the direction of Vulcan Steel i.e., Vulcan Steel and Immuron go up and down completely randomly.
Pair Corralation between Vulcan Steel and Immuron
Assuming the 90 days trading horizon Vulcan Steel is expected to under-perform the Immuron. In addition to that, Vulcan Steel is 1.14 times more volatile than Immuron. It trades about -0.05 of its total potential returns per unit of risk. Immuron is currently generating about 0.03 per unit of volatility. If you would invest 8.20 in Immuron on September 13, 2024 and sell it today you would earn a total of 0.20 from holding Immuron or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Vulcan Steel vs. Immuron
Performance |
| Timeline |
| Vulcan Steel |
| Immuron |
Vulcan Steel and Immuron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Steel and Immuron
The main advantage of trading using opposite Vulcan Steel and Immuron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Steel position performs unexpectedly, Immuron 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 Immuron will offset losses from the drop in Immuron's long position.| Vulcan Steel vs. Wt Financial Group | Vulcan Steel vs. Insignia Financial | Vulcan Steel vs. Hutchison Telecommunications | Vulcan Steel vs. Richmond Vanadium Technology |
| Immuron vs. Charter Hall Retail | Immuron vs. Super Retail Group | Immuron vs. Saferoads Holdings | Immuron vs. MetalsGrove Mining |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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