Correlation Between Vulcan Materials and Castle Biosciences
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Castle Biosciences 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 Castle Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and Castle Biosciences, you can compare the effects of market volatilities on Vulcan Materials and Castle Biosciences 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 Castle Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Castle Biosciences.
Diversification Opportunities for Vulcan Materials and Castle Biosciences
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vulcan and Castle is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and Castle Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castle Biosciences 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 Castle Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castle Biosciences has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Castle Biosciences go up and down completely randomly.
Pair Corralation between Vulcan Materials and Castle Biosciences
Considering the 90-day investment horizon Vulcan Materials is expected to generate 0.57 times more return on investment than Castle Biosciences. However, Vulcan Materials is 1.75 times less risky than Castle Biosciences. It trades about 0.08 of its potential returns per unit of risk. Castle Biosciences is currently generating about -0.23 per unit of risk. If you would invest 25,814 in Vulcan Materials on April 19, 2025 and sell it today you would earn a total of 557.00 from holding Vulcan Materials or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials vs. Castle Biosciences
Performance |
| Timeline |
| Vulcan Materials |
| Castle Biosciences |
Vulcan Materials and Castle Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Castle Biosciences
The main advantage of trading using opposite Vulcan Materials and Castle Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Castle Biosciences 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 Castle Biosciences will offset losses from the drop in Castle Biosciences' 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 |
| Castle Biosciences vs. Personalis | Castle Biosciences vs. Sera Prognostics | Castle Biosciences vs. CareDx Inc | Castle Biosciences vs. DarioHealth Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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