Correlation Between Vulcan Materials and Evolution

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

By analyzing existing cross correlation between Vulcan Materials and Evolution AB, you can compare the effects of market volatilities on Vulcan Materials and Evolution 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 Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Evolution.

Diversification Opportunities for Vulcan Materials and Evolution

-0.71

Correlation Coefficient

Vulcan Materials  Evolution

Pay attention - limited upside

The 3 months correlation between Vulcan and Evolution is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and Evolution AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution AB 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 Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution AB has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Evolution go up and down completely randomly.

Pair Corralation between Vulcan Materials and Evolution

Assuming the 90 days horizon Vulcan Materials is expected to generate 0.53 times more return on investment than Evolution. However, Vulcan Materials is 1.87 times less risky than Evolution. It trades about 0.09 of its potential returns per unit of risk. Evolution AB is currently generating about 0.03 per unit of risk. If you would invest  20,762  in Vulcan Materials on April 20, 2025 and sell it today you would earn a total of  1,838  from holding Vulcan Materials or generate 8.85% return on investment over 90 days.

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

Vulcan Materials  vs.  Evolution AB

Vulcan Materials

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vulcan Materials are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vulcan Materials may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Evolution AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Evolution may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Vulcan Materials and Evolution

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

The idea behind Vulcan Materials and Evolution AB 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.