Correlation Between Vulcan Materials and 26442CBC7

Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and 26442CBC7 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 26442CBC7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vulcan Materials and DUK 345 15 APR 51, you can compare the effects of market volatilities on Vulcan Materials and 26442CBC7 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 26442CBC7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and 26442CBC7.

Diversification Opportunities for Vulcan Materials and 26442CBC7

0.43

Correlation Coefficient

Vulcan Materials  26442CBC7

Very weak diversification

The 3 months correlation between Vulcan and 26442CBC7 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and DUK 345 15 APR 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUK 345 15 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 26442CBC7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUK 345 15 has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and 26442CBC7 go up and down completely randomly.

Pair Corralation between Vulcan Materials and 26442CBC7

Considering the 90-day investment horizon Vulcan Materials is expected to generate 0.62 times more return on investment than 26442CBC7. However, Vulcan Materials is 1.6 times less risky than 26442CBC7. It trades about -0.4 of its potential returns per unit of risk. DUK 345 15 APR 51 is currently generating about -0.27 per unit of risk. If you would invest  28,123  in Vulcan Materials on October 10, 2024 and sell it today you would lose (2,595) from holding Vulcan Materials or give up 9.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	33.33%
Values	Daily Returns

Vulcan Materials  vs.  DUK 345 15 APR 51

Vulcan Materials

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vulcan Materials are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Vulcan Materials is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

DUK 345 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUK 345 15 APR 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for DUK 345 15 APR 51 investors.

Pair Trading with Vulcan Materials and 26442CBC7

The main advantage of trading using opposite Vulcan Materials and 26442CBC7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, 26442CBC7 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 26442CBC7 will offset losses from the drop in 26442CBC7's long position.

The idea behind Vulcan Materials and DUK 345 15 APR 51 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.