Correlation Between Global Net and Vulcan Materials

Can any of the company-specific risk be diversified away by investing in both Global Net and Vulcan Materials 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 Global Net and Vulcan Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Net Lease and Vulcan Materials Co, you can compare the effects of market volatilities on Global Net and Vulcan Materials 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 Global Net with a short position of Vulcan Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Vulcan Materials.

Diversification Opportunities for Global Net and Vulcan Materials

-0.77

Correlation Coefficient

Global Net  Vulcan Materials

Pay attention - limited upside

The 3 months correlation between Global and Vulcan is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Vulcan Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials and Global Net 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 Global Net Lease are associated (or correlated) with Vulcan Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Materials has no effect on the direction of Global Net i.e., Global Net and Vulcan Materials go up and down completely randomly.

Pair Corralation between Global Net and Vulcan Materials

Assuming the 90 days trading horizon Global Net Lease is expected to generate 0.91 times more return on investment than Vulcan Materials. However, Global Net Lease is 1.1 times less risky than Vulcan Materials. It trades about 0.15 of its potential returns per unit of risk. Vulcan Materials Co is currently generating about -0.09 per unit of risk. If you would invest  686.00  in Global Net Lease on December 23, 2024 and sell it today you would earn a total of  104.00  from holding Global Net Lease or generate 15.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Global Net Lease  vs.  Vulcan Materials Co

Global Net Lease

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Net Lease are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Global Net unveiled solid returns over the last few months and may actually be approaching a breakup point.

Vulcan Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vulcan Materials Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Global Net and Vulcan Materials

The main advantage of trading using opposite Global Net and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, Vulcan Materials 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 Vulcan Materials will offset losses from the drop in Vulcan Materials' long position.

The idea behind Global Net Lease and Vulcan Materials Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.