Correlation Between VULCAN MATERIALS and Aon PLC
Can any of the company-specific risk be diversified away by investing in both VULCAN MATERIALS and Aon PLC 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 Aon PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VULCAN MATERIALS and Aon PLC, you can compare the effects of market volatilities on VULCAN MATERIALS and Aon PLC 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 Aon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of VULCAN MATERIALS and Aon PLC.
Diversification Opportunities for VULCAN MATERIALS and Aon PLC
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VULCAN and Aon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and Aon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aon PLC 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 Aon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aon PLC has no effect on the direction of VULCAN MATERIALS i.e., VULCAN MATERIALS and Aon PLC go up and down completely randomly.
Pair Corralation between VULCAN MATERIALS and Aon PLC
If you would invest 0.00 in Aon PLC on October 9, 2024 and sell it today you would earn a total of 0.00 from holding Aon PLC or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 2.7% |
Values | Daily Returns |
VULCAN MATERIALS vs. Aon PLC
Performance |
Timeline |
VULCAN MATERIALS |
Aon PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
VULCAN MATERIALS and Aon PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VULCAN MATERIALS and Aon PLC
The main advantage of trading using opposite VULCAN MATERIALS and Aon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS position performs unexpectedly, Aon PLC 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 Aon PLC will offset losses from the drop in Aon PLC's long position.VULCAN MATERIALS vs. CRISPR Therapeutics AG | VULCAN MATERIALS vs. INTERSHOP Communications Aktiengesellschaft | VULCAN MATERIALS vs. Zoom Video Communications | VULCAN MATERIALS vs. ePlay Digital |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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