Correlation Between EAGLE MATERIALS and Acadia Healthcare
Can any of the company-specific risk be diversified away by investing in both EAGLE MATERIALS and Acadia Healthcare 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 Acadia Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAGLE MATERIALS and Acadia Healthcare, you can compare the effects of market volatilities on EAGLE MATERIALS and Acadia Healthcare 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 Acadia Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAGLE MATERIALS and Acadia Healthcare.
Diversification Opportunities for EAGLE MATERIALS and Acadia Healthcare
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between EAGLE and Acadia is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding EAGLE MATERIALS and Acadia Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Healthcare 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 Acadia Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Healthcare has no effect on the direction of EAGLE MATERIALS i.e., EAGLE MATERIALS and Acadia Healthcare go up and down completely randomly.
Pair Corralation between EAGLE MATERIALS and Acadia Healthcare
Assuming the 90 days trading horizon EAGLE MATERIALS is expected to generate 0.78 times more return on investment than Acadia Healthcare. However, EAGLE MATERIALS is 1.29 times less risky than Acadia Healthcare. It trades about 0.07 of its potential returns per unit of risk. Acadia Healthcare is currently generating about -0.04 per unit of risk. If you would invest 12,959 in EAGLE MATERIALS on October 14, 2024 and sell it today you would earn a total of 10,041 from holding EAGLE MATERIALS or generate 77.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAGLE MATERIALS vs. Acadia Healthcare
Performance |
| Timeline |
| EAGLE MATERIALS |
| Acadia Healthcare |
EAGLE MATERIALS and Acadia Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAGLE MATERIALS and Acadia Healthcare
The main advantage of trading using opposite EAGLE MATERIALS and Acadia Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAGLE MATERIALS position performs unexpectedly, Acadia Healthcare 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 Acadia Healthcare will offset losses from the drop in Acadia Healthcare's long position.| EAGLE MATERIALS vs. Elmos Semiconductor SE | EAGLE MATERIALS vs. TOREX SEMICONDUCTOR LTD | EAGLE MATERIALS vs. Darden Restaurants | EAGLE MATERIALS vs. THAI BEVERAGE |
| Acadia Healthcare vs. Goodyear Tire Rubber | Acadia Healthcare vs. SANOK RUBBER ZY | Acadia Healthcare vs. EAGLE MATERIALS | Acadia Healthcare vs. MOLSON RS BEVERAGE |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |