Correlation Between Clean Seas and Vulcan Steel

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

By analyzing existing cross correlation between Clean Seas Seafood and Vulcan Steel, you can compare the effects of market volatilities on Clean Seas and Vulcan Steel 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 Clean Seas with a short position of Vulcan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Seas and Vulcan Steel.

Diversification Opportunities for Clean Seas and Vulcan Steel

-0.42

Correlation Coefficient

Clean Seas  Vulcan Steel

Very good diversification

The 3 months correlation between Clean and Vulcan is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Clean Seas Seafood and Vulcan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Steel and Clean Seas 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 Clean Seas Seafood are associated (or correlated) with Vulcan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Steel has no effect on the direction of Clean Seas i.e., Clean Seas and Vulcan Steel go up and down completely randomly.

Pair Corralation between Clean Seas and Vulcan Steel

Assuming the 90 days trading horizon Clean Seas Seafood is expected to generate 0.32 times more return on investment than Vulcan Steel. However, Clean Seas Seafood is 3.12 times less risky than Vulcan Steel. It trades about 0.13 of its potential returns per unit of risk. Vulcan Steel is currently generating about -0.05 per unit of risk. If you would invest  13.00  in Clean Seas Seafood on April 25, 2025 and sell it today you would earn a total of  1.00  from holding Clean Seas Seafood or generate 7.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Clean Seas Seafood  vs.  Vulcan Steel

Clean Seas Seafood

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Seas Seafood are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Clean Seas may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Vulcan Steel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vulcan Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Clean Seas and Vulcan Steel

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

The idea behind Clean Seas Seafood and Vulcan Steel 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.