Correlation Between EAGLE MATERIALS and HEALTHCARE REAL
Can any of the company-specific risk be diversified away by investing in both EAGLE MATERIALS and HEALTHCARE REAL 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 HEALTHCARE REAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAGLE MATERIALS and HEALTHCARE REAL A, you can compare the effects of market volatilities on EAGLE MATERIALS and HEALTHCARE REAL 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 HEALTHCARE REAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAGLE MATERIALS and HEALTHCARE REAL.
Diversification Opportunities for EAGLE MATERIALS and HEALTHCARE REAL
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EAGLE and HEALTHCARE is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding EAGLE MATERIALS and HEALTHCARE REAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE REAL A 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 HEALTHCARE REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE REAL A has no effect on the direction of EAGLE MATERIALS i.e., EAGLE MATERIALS and HEALTHCARE REAL go up and down completely randomly.
Pair Corralation between EAGLE MATERIALS and HEALTHCARE REAL
Assuming the 90 days trading horizon EAGLE MATERIALS is expected to generate 1.0 times more return on investment than HEALTHCARE REAL. However, EAGLE MATERIALS is 1.0 times more volatile than HEALTHCARE REAL A. It trades about 0.11 of its potential returns per unit of risk. HEALTHCARE REAL A is currently generating about 0.03 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAGLE MATERIALS vs. HEALTHCARE REAL A
Performance |
| Timeline |
| EAGLE MATERIALS |
| HEALTHCARE REAL A |
EAGLE MATERIALS and HEALTHCARE REAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAGLE MATERIALS and HEALTHCARE REAL
The main advantage of trading using opposite EAGLE MATERIALS and HEALTHCARE REAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAGLE MATERIALS position performs unexpectedly, HEALTHCARE REAL 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 HEALTHCARE REAL will offset losses from the drop in HEALTHCARE REAL'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 |
| HEALTHCARE REAL vs. China Eastern Airlines | HEALTHCARE REAL vs. HEALTHSTREAM | HEALTHCARE REAL vs. Aegean Airlines SA | HEALTHCARE REAL vs. RCI Hospitality Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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