Correlation Between Vulcan Materials and PPL
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and PPL 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 PPL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and PPL Corporation, you can compare the effects of market volatilities on Vulcan Materials and PPL 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 PPL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and PPL.
Diversification Opportunities for Vulcan Materials and PPL
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vulcan and PPL is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and PPL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPL Corporation 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 PPL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPL Corporation has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and PPL go up and down completely randomly.
Pair Corralation between Vulcan Materials and PPL
Considering the 90-day investment horizon Vulcan Materials is expected to generate about the same return on investment as PPL Corporation. However, Vulcan Materials is 1.31 times more volatile than PPL Corporation. It trades about -0.01 of its potential returns per unit of risk. PPL Corporation is currently producing about -0.02 per unit of risk. If you would invest 3,569 in PPL Corporation on September 5, 2025 and sell it today you would lose (47.00) from holding PPL Corporation or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials vs. PPL Corp.
Performance |
| Timeline |
| Vulcan Materials |
| PPL Corporation |
Vulcan Materials and PPL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and PPL
The main advantage of trading using opposite Vulcan Materials and PPL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, PPL 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 PPL will offset losses from the drop in PPL's long position.| Vulcan Materials vs. Cemex SAB de | Vulcan Materials vs. Sinosteel Luonai Materials | Vulcan Materials vs. Shandong Longquan Pipeline | Vulcan Materials vs. Prism Johnson Limited |
| PPL vs. Goodyear Tire Rubber | PPL vs. Neo Performance Materials | PPL vs. Yokohama Rubber Co | PPL vs. Vulcan Materials |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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