Correlation Between Progressive and VULCAN MATERIALS

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

By analyzing existing cross correlation between The Progressive and VULCAN MATERIALS, you can compare the effects of market volatilities on Progressive and VULCAN MATERIALS 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 Progressive with a short position of VULCAN MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive and VULCAN MATERIALS.

Diversification Opportunities for Progressive and VULCAN MATERIALS

0.54

Correlation Coefficient

Progressive  VULCAN MATERIALS

Very weak diversification

The 3 months correlation between Progressive and VULCAN is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding The Progressive and VULCAN MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VULCAN MATERIALS and Progressive 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 The Progressive are associated (or correlated) with VULCAN MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VULCAN MATERIALS has no effect on the direction of Progressive i.e., Progressive and VULCAN MATERIALS go up and down completely randomly.

Pair Corralation between Progressive and VULCAN MATERIALS

Assuming the 90 days horizon The Progressive is expected to under-perform the VULCAN MATERIALS. But the stock apears to be less risky and, when comparing its historical volatility, The Progressive is 1.61 times less risky than VULCAN MATERIALS. The stock trades about -0.12 of its potential returns per unit of risk. The VULCAN MATERIALS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  21,760  in VULCAN MATERIALS on April 24, 2025 and sell it today you would earn a total of  840.00  from holding VULCAN MATERIALS or generate 3.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

The Progressive  vs.  VULCAN MATERIALS

Progressive

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Progressive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

VULCAN MATERIALS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VULCAN MATERIALS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, VULCAN MATERIALS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Progressive and VULCAN MATERIALS

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

The idea behind The Progressive and VULCAN MATERIALS 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.