Correlation Between EAGLE MATERIALS and Biogen
Can any of the company-specific risk be diversified away by investing in both EAGLE MATERIALS and Biogen 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 Biogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAGLE MATERIALS and Biogen Inc, you can compare the effects of market volatilities on EAGLE MATERIALS and Biogen 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 Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAGLE MATERIALS and Biogen.
Diversification Opportunities for EAGLE MATERIALS and Biogen
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EAGLE and Biogen is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding EAGLE MATERIALS and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc 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 Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of EAGLE MATERIALS i.e., EAGLE MATERIALS and Biogen go up and down completely randomly.
Pair Corralation between EAGLE MATERIALS and Biogen
Assuming the 90 days trading horizon EAGLE MATERIALS is expected to generate 1.21 times more return on investment than Biogen. However, EAGLE MATERIALS is 1.21 times more volatile than Biogen Inc. It trades about 0.08 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.09 per unit of risk. If you would invest 15,603 in EAGLE MATERIALS on September 12, 2024 and sell it today you would earn a total of 10,997 from holding EAGLE MATERIALS or generate 70.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAGLE MATERIALS vs. Biogen Inc
Performance |
| Timeline |
| EAGLE MATERIALS |
| Biogen Inc |
EAGLE MATERIALS and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAGLE MATERIALS and Biogen
The main advantage of trading using opposite EAGLE MATERIALS and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAGLE MATERIALS position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen's long position.| EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc |
| Biogen vs. Ross Stores | Biogen vs. QURATE RETAIL INC | Biogen vs. Tyson Foods | Biogen vs. ITALIAN WINE BRANDS |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |