Correlation Between Vulcan Materials and CarsalesCom

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and CarsalesCom 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 CarsalesCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and CarsalesCom, you can compare the effects of market volatilities on Vulcan Materials and CarsalesCom 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 CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and CarsalesCom.

Diversification Opportunities for Vulcan Materials and CarsalesCom

VulcanCarsalesComDiversified AwayVulcanCarsalesComDiversified Away100%
0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between Vulcan and CarsalesCom is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 are associated (or correlated) with CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and CarsalesCom go up and down completely randomly.

Pair Corralation between Vulcan Materials and CarsalesCom

Assuming the 90 days horizon Vulcan Materials is expected to generate 0.71 times more return on investment than CarsalesCom. However, Vulcan Materials is 1.4 times less risky than CarsalesCom. It trades about -0.08 of its potential returns per unit of risk. CarsalesCom is currently generating about -0.08 per unit of risk. If you would invest  27,000  in Vulcan Materials on November 22, 2024 and sell it today you would lose (1,600) from holding Vulcan Materials or give up 5.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Vulcan Materials  vs.  CarsalesCom

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-505
JavaScript chart by amCharts 3.21.15VMC WN6
       Timeline  
Vulcan Materials 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Vulcan Materials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vulcan Materials is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb240245250255260265270275
CarsalesCom 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CarsalesCom has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb21.52222.52323.52424.52525.5

Vulcan Materials and CarsalesCom Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.08-1.58-1.08-0.58-0.090.340.841.341.842.34 0.100.150.200.25
JavaScript chart by amCharts 3.21.15VMC WN6
       Returns  

Pair Trading with Vulcan Materials and CarsalesCom

The main advantage of trading using opposite Vulcan Materials and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's long position.
The idea behind Vulcan Materials and CarsalesCom 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance