Correlation Between AT S and VULCAN MATERIALS

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Can any of the company-specific risk be diversified away by investing in both AT S 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 AT S and VULCAN MATERIALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AT S Austria and VULCAN MATERIALS, you can compare the effects of market volatilities on AT S 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 AT S with a short position of VULCAN MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AT S and VULCAN MATERIALS.

Diversification Opportunities for AT S and VULCAN MATERIALS

-0.79
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between AUS and VULCAN is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding AT S Austria and VULCAN MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VULCAN MATERIALS and AT S 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 AT S Austria 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 AT S i.e., AT S and VULCAN MATERIALS go up and down completely randomly.

Pair Corralation between AT S and VULCAN MATERIALS

Assuming the 90 days horizon AT S Austria is expected to under-perform the VULCAN MATERIALS. In addition to that, AT S is 3.08 times more volatile than VULCAN MATERIALS. It trades about -0.22 of its total potential returns per unit of risk. VULCAN MATERIALS is currently generating about -0.25 per unit of volatility. If you would invest  27,200  in VULCAN MATERIALS on September 25, 2024 and sell it today you would lose (2,000) from holding VULCAN MATERIALS or give up 7.35% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

AT S Austria  vs.  VULCAN MATERIALS

 Performance 
       Timeline  
AT S Austria 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AT S Austria has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
VULCAN MATERIALS 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in VULCAN MATERIALS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VULCAN MATERIALS unveiled solid returns over the last few months and may actually be approaching a breakup point.

AT S and VULCAN MATERIALS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AT S and VULCAN MATERIALS

The main advantage of trading using opposite AT S and VULCAN MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AT S 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's long position.
The idea behind AT S Austria and VULCAN MATERIALS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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