Correlation Between Vulcan Materials and Academy Sports
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Academy Sports 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 Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and Academy Sports Outdoors, you can compare the effects of market volatilities on Vulcan Materials and Academy Sports 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 Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Academy Sports.
Diversification Opportunities for Vulcan Materials and Academy Sports
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vulcan and Academy is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors 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 Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Academy Sports go up and down completely randomly.
Pair Corralation between Vulcan Materials and Academy Sports
Considering the 90-day investment horizon Vulcan Materials is expected to generate 0.43 times more return on investment than Academy Sports. However, Vulcan Materials is 2.32 times less risky than Academy Sports. It trades about 0.14 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about 0.04 per unit of risk. If you would invest 26,509 in Vulcan Materials on June 12, 2025 and sell it today you would earn a total of 2,867 from holding Vulcan Materials or generate 10.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials vs. Academy Sports Outdoors
Performance |
| Timeline |
| Vulcan Materials |
| Academy Sports Outdoors |
Vulcan Materials and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Academy Sports
The main advantage of trading using opposite Vulcan Materials and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Academy Sports 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 Academy Sports will offset losses from the drop in Academy Sports' long position.| Vulcan Materials vs. Martin Marietta Materials | Vulcan Materials vs. CRH PLC ADR | Vulcan Materials vs. Eagle Materials | Vulcan Materials vs. United States Lime |
| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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