Correlation Between AUCKLAND INTL and EAGLE MATERIALS
Can any of the company-specific risk be diversified away by investing in both AUCKLAND INTL 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 AUCKLAND INTL and EAGLE MATERIALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUCKLAND INTL AIRPORT and EAGLE MATERIALS, you can compare the effects of market volatilities on AUCKLAND INTL 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 AUCKLAND INTL with a short position of EAGLE MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUCKLAND INTL and EAGLE MATERIALS.
Diversification Opportunities for AUCKLAND INTL and EAGLE MATERIALS
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AUCKLAND and EAGLE is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding AUCKLAND INTL AIRPORT and EAGLE MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAGLE MATERIALS and AUCKLAND INTL 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 AUCKLAND INTL AIRPORT 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 AUCKLAND INTL i.e., AUCKLAND INTL and EAGLE MATERIALS go up and down completely randomly.
Pair Corralation between AUCKLAND INTL and EAGLE MATERIALS
Assuming the 90 days trading horizon AUCKLAND INTL AIRPORT is expected to generate 1.3 times more return on investment than EAGLE MATERIALS. However, AUCKLAND INTL is 1.3 times more volatile than EAGLE MATERIALS. It trades about 0.2 of its potential returns per unit of risk. EAGLE MATERIALS is currently generating about -0.28 per unit of risk. If you would invest 414.00 in AUCKLAND INTL AIRPORT on September 13, 2024 and sell it today you would earn a total of 38.00 from holding AUCKLAND INTL AIRPORT or generate 9.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AUCKLAND INTL AIRPORT vs. EAGLE MATERIALS
Performance |
| Timeline |
| AUCKLAND INTL AIRPORT |
| EAGLE MATERIALS |
AUCKLAND INTL and EAGLE MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUCKLAND INTL and EAGLE MATERIALS
The main advantage of trading using opposite AUCKLAND INTL and EAGLE MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUCKLAND INTL 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.| AUCKLAND INTL vs. WILLIS LEASE FIN | AUCKLAND INTL vs. Cass Information Systems | AUCKLAND INTL vs. Geely Automobile Holdings | AUCKLAND INTL vs. Science Applications International |
| EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc |
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 CEOs Directory module to screen CEOs from public companies around the world.
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