Correlation Between OSX Brasil and Vulcan Materials

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

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

Diversification Opportunities for OSX Brasil and Vulcan Materials

-0.26

Correlation Coefficient

OSX Brasil  Vulcan Materials

Very good diversification

The 3 months correlation between OSX and Vulcan is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding OSX Brasil SA and Vulcan Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials and OSX Brasil 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 OSX Brasil SA 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 OSX Brasil i.e., OSX Brasil and Vulcan Materials go up and down completely randomly.

Pair Corralation between OSX Brasil and Vulcan Materials

Assuming the 90 days trading horizon OSX Brasil SA is expected to under-perform the Vulcan Materials. In addition to that, OSX Brasil is 3.18 times more volatile than Vulcan Materials. It trades about 0.0 of its total potential returns per unit of risk. Vulcan Materials is currently generating about 0.09 per unit of volatility. If you would invest  1,723  in Vulcan Materials on October 8, 2024 and sell it today you would earn a total of  970.00  from holding Vulcan Materials or generate 56.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.31%
Values	Daily Returns

OSX Brasil SA  vs.  Vulcan Materials

OSX Brasil SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OSX Brasil SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Vulcan Materials

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vulcan Materials are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Vulcan Materials sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OSX Brasil and Vulcan Materials

The main advantage of trading using opposite OSX Brasil and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSX Brasil 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 OSX Brasil SA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.