Correlation Between EAGLE MATERIALS and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both EAGLE MATERIALS and Compagnie Plastic 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 Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAGLE MATERIALS and Compagnie Plastic Omnium, you can compare the effects of market volatilities on EAGLE MATERIALS and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAGLE MATERIALS and Compagnie Plastic.
Diversification Opportunities for EAGLE MATERIALS and Compagnie Plastic
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between EAGLE and Compagnie is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding EAGLE MATERIALS and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of EAGLE MATERIALS i.e., EAGLE MATERIALS and Compagnie Plastic go up and down completely randomly.
Pair Corralation between EAGLE MATERIALS and Compagnie Plastic
Assuming the 90 days trading horizon EAGLE MATERIALS is expected to generate 0.97 times more return on investment than Compagnie Plastic. However, EAGLE MATERIALS is 1.03 times less risky than Compagnie Plastic. It trades about 0.23 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.28 per unit of risk. If you would invest 26,400 in EAGLE MATERIALS on August 25, 2024 and sell it today you would earn a total of 3,400 from holding EAGLE MATERIALS or generate 12.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
EAGLE MATERIALS vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| EAGLE MATERIALS |
| Compagnie Plastic Omnium |
EAGLE MATERIALS and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAGLE MATERIALS and Compagnie Plastic
The main advantage of trading using opposite EAGLE MATERIALS and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAGLE MATERIALS position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc |
| Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings | Compagnie Plastic 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stocks Directory Find actively traded stocks across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |