Correlation Between Osprey Solana and Vulcan Materials

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

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

Diversification Opportunities for Osprey Solana and Vulcan Materials

0.29

Correlation Coefficient

Osprey Solana  Vulcan Materials

Modest diversification

The 3 months correlation between Osprey and Vulcan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Osprey Solana Trust and Vulcan Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials and Osprey Solana 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 Osprey Solana Trust 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 Osprey Solana i.e., Osprey Solana and Vulcan Materials go up and down completely randomly.

Pair Corralation between Osprey Solana and Vulcan Materials

Given the investment horizon of 90 days Osprey Solana Trust is expected to under-perform the Vulcan Materials. In addition to that, Osprey Solana is 5.75 times more volatile than Vulcan Materials. It trades about -0.25 of its total potential returns per unit of risk. Vulcan Materials is currently generating about 0.16 per unit of volatility. If you would invest  26,431  in Vulcan Materials on October 25, 2024 and sell it today you would earn a total of  1,007  from holding Vulcan Materials or generate 3.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Osprey Solana Trust  vs.  Vulcan Materials

Osprey Solana Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Osprey Solana Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Osprey Solana disclosed solid returns over the last few months and may actually be approaching a breakup point.

Vulcan Materials

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vulcan Materials are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Vulcan Materials may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Osprey Solana and Vulcan Materials

The main advantage of trading using opposite Osprey Solana and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osprey Solana 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 Osprey Solana Trust 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.