Correlation Between EAGLE MATERIALS and Assura PLC
Can any of the company-specific risk be diversified away by investing in both EAGLE MATERIALS and Assura PLC 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 EAGLE MATERIALS and Assura PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAGLE MATERIALS and Assura PLC, you can compare the effects of market volatilities on EAGLE MATERIALS and Assura PLC 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 EAGLE MATERIALS with a short position of Assura PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAGLE MATERIALS and Assura PLC.
Diversification Opportunities for EAGLE MATERIALS and Assura PLC
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between EAGLE and Assura is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding EAGLE MATERIALS and Assura PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assura PLC and EAGLE 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 EAGLE MATERIALS are associated (or correlated) with Assura PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assura PLC has no effect on the direction of EAGLE MATERIALS i.e., EAGLE MATERIALS and Assura PLC go up and down completely randomly.
Pair Corralation between EAGLE MATERIALS and Assura PLC
Assuming the 90 days trading horizon EAGLE MATERIALS is expected to generate 0.6 times more return on investment than Assura PLC. However, EAGLE MATERIALS is 1.67 times less risky than Assura PLC. It trades about 0.11 of its potential returns per unit of risk. Assura PLC is currently generating about 0.01 per unit of risk. If you would invest 24,000 in EAGLE MATERIALS on November 3, 2024 and sell it today you would earn a total of 800.00 from holding EAGLE MATERIALS or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAGLE MATERIALS vs. Assura PLC
Performance |
| Timeline |
| EAGLE MATERIALS |
| Assura PLC |
EAGLE MATERIALS and Assura PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAGLE MATERIALS and Assura PLC
The main advantage of trading using opposite EAGLE MATERIALS and Assura PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAGLE MATERIALS position performs unexpectedly, Assura PLC 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 Assura PLC will offset losses from the drop in Assura PLC's long position.| EAGLE MATERIALS vs. CEOTRONICS | EAGLE MATERIALS vs. Air Transport Services | EAGLE MATERIALS vs. Yuexiu Transport Infrastructure | EAGLE MATERIALS vs. Transport International Holdings |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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