Correlation Between Vulcan Materials and Prudential Emerging
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Prudential Emerging 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 Prudential Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and Prudential Emerging Markets, you can compare the effects of market volatilities on Vulcan Materials and Prudential Emerging 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 Prudential Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Prudential Emerging.
Diversification Opportunities for Vulcan Materials and Prudential Emerging
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vulcan and Prudential is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and Prudential Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Emerging 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 Prudential Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Emerging has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Prudential Emerging go up and down completely randomly.
Pair Corralation between Vulcan Materials and Prudential Emerging
Considering the 90-day investment horizon Vulcan Materials is expected to generate 3.11 times more return on investment than Prudential Emerging. However, Vulcan Materials is 3.11 times more volatile than Prudential Emerging Markets. It trades about 0.14 of its potential returns per unit of risk. Prudential Emerging Markets is currently generating about 0.19 per unit of risk. If you would invest 26,294 in Vulcan Materials on May 31, 2025 and sell it today you would earn a total of 2,716 from holding Vulcan Materials or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Vulcan Materials vs. Prudential Emerging Markets
Performance |
| Timeline |
| Vulcan Materials |
| Prudential Emerging |
Vulcan Materials and Prudential Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Prudential Emerging
The main advantage of trading using opposite Vulcan Materials and Prudential Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Prudential Emerging 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 Prudential Emerging will offset losses from the drop in Prudential Emerging's long position.| Vulcan Materials vs. Martin Marietta Materials | Vulcan Materials vs. TDH Holdings | Vulcan Materials vs. Senmiao Technology | Vulcan Materials vs. China SXT Pharmaceuticals |
| Prudential Emerging vs. Jpmorgan High Yield | Prudential Emerging vs. Blackrock High Yield | Prudential Emerging vs. Transamerica High Yield | Prudential Emerging vs. American Century High |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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