Correlation Between SIDETRADE and EAGLE MATERIALS
Can any of the company-specific risk be diversified away by investing in both SIDETRADE and EAGLE 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 SIDETRADE and EAGLE MATERIALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIDETRADE EO 1 and EAGLE MATERIALS, you can compare the effects of market volatilities on SIDETRADE and EAGLE 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 SIDETRADE with a short position of EAGLE MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIDETRADE and EAGLE MATERIALS.
Diversification Opportunities for SIDETRADE and EAGLE MATERIALS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SIDETRADE and EAGLE is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SIDETRADE EO 1 and EAGLE MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAGLE MATERIALS and SIDETRADE 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 SIDETRADE EO 1 are associated (or correlated) with EAGLE MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAGLE MATERIALS has no effect on the direction of SIDETRADE i.e., SIDETRADE and EAGLE MATERIALS go up and down completely randomly.
Pair Corralation between SIDETRADE and EAGLE MATERIALS
Assuming the 90 days horizon SIDETRADE is expected to generate 1.3 times less return on investment than EAGLE MATERIALS. In addition to that, SIDETRADE is 1.06 times more volatile than EAGLE MATERIALS. It trades about 0.07 of its total potential returns per unit of risk. EAGLE MATERIALS is currently generating about 0.1 per unit of volatility. If you would invest 15,279 in EAGLE MATERIALS on August 31, 2024 and sell it today you would earn a total of 13,921 from holding EAGLE MATERIALS or generate 91.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.74% |
| Values | Daily Returns |
SIDETRADE EO 1 vs. EAGLE MATERIALS
Performance |
| Timeline |
| SIDETRADE EO 1 |
| EAGLE MATERIALS |
SIDETRADE and EAGLE MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIDETRADE and EAGLE MATERIALS
The main advantage of trading using opposite SIDETRADE and EAGLE MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIDETRADE position performs unexpectedly, EAGLE 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 EAGLE MATERIALS will offset losses from the drop in EAGLE MATERIALS's long position.| SIDETRADE vs. Playtech plc | SIDETRADE vs. ETFS Coffee ETC | SIDETRADE vs. VARIOUS EATERIES LS | SIDETRADE vs. Clean Energy Fuels |
| EAGLE MATERIALS vs. Burlington Stores | EAGLE MATERIALS vs. Ameriprise Financial | EAGLE MATERIALS vs. BJs Wholesale Club | EAGLE MATERIALS vs. National Retail Properties |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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