Correlation Between Enphase Energy and Eagle Materials
Can any of the company-specific risk be diversified away by investing in both Enphase Energy 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 Enphase Energy and Eagle Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and Eagle Materials, you can compare the effects of market volatilities on Enphase Energy 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 Enphase Energy with a short position of Eagle Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and Eagle Materials.
Diversification Opportunities for Enphase Energy and Eagle Materials
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enphase and Eagle is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and Eagle Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Materials and Enphase Energy 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 Enphase Energy 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 Enphase Energy i.e., Enphase Energy and Eagle Materials go up and down completely randomly.
Pair Corralation between Enphase Energy and Eagle Materials
Assuming the 90 days horizon Enphase Energy is expected to under-perform the Eagle Materials. In addition to that, Enphase Energy is 2.11 times more volatile than Eagle Materials. It trades about -0.05 of its total potential returns per unit of risk. Eagle Materials is currently generating about 0.09 per unit of volatility. If you would invest 12,649 in Eagle Materials on September 3, 2024 and sell it today you would earn a total of 16,351 from holding Eagle Materials or generate 129.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enphase Energy vs. Eagle Materials
Performance |
| Timeline |
| Enphase Energy |
| Eagle Materials |
Enphase Energy and Eagle Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy and Eagle Materials
The main advantage of trading using opposite Enphase Energy and Eagle Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy 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' long position.| Enphase Energy vs. Jacquet Metal Service | Enphase Energy vs. GREENX METALS LTD | Enphase Energy vs. LION ONE METALS | Enphase Energy vs. Western Copper and |
| Eagle Materials vs. Vulcan Materials | Eagle Materials vs. Superior Plus Corp | Eagle Materials vs. NMI Holdings | Eagle Materials vs. Origin Agritech |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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