Correlation Between Vulcan Materials and AcadeMedia

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Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and AcadeMedia 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 AcadeMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials Co and AcadeMedia AB, you can compare the effects of market volatilities on Vulcan Materials and AcadeMedia 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 AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and AcadeMedia.

Diversification Opportunities for Vulcan Materials and AcadeMedia

VulcanAcadeMediaDiversified AwayVulcanAcadeMediaDiversified Away100%
-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Vulcan and AcadeMedia is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials Co and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB 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 Co are associated (or correlated) with AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and AcadeMedia go up and down completely randomly.

Pair Corralation between Vulcan Materials and AcadeMedia

Assuming the 90 days trading horizon Vulcan Materials Co is expected to under-perform the AcadeMedia. In addition to that, Vulcan Materials is 1.03 times more volatile than AcadeMedia AB. It trades about -0.12 of its total potential returns per unit of risk. AcadeMedia AB is currently generating about 0.27 per unit of volatility. If you would invest  5,906  in AcadeMedia AB on November 26, 2024 and sell it today you would earn a total of  1,649  from holding AcadeMedia AB or generate 27.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Vulcan Materials Co  vs.  AcadeMedia AB

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510152025
JavaScript chart by amCharts 3.21.150LRK 0RHN
       Timeline  
Vulcan Materials 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb250255260265270275280285290
AcadeMedia AB 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in AcadeMedia AB are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AcadeMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5560657075

Vulcan Materials and AcadeMedia Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.58-1.93-1.28-0.640.00.591.21.82.4 0.060.080.100.120.140.16
JavaScript chart by amCharts 3.21.150LRK 0RHN
       Returns  

Pair Trading with Vulcan Materials and AcadeMedia

The main advantage of trading using opposite Vulcan Materials and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia's long position.
The idea behind Vulcan Materials Co and AcadeMedia AB 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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