Correlation Between EAGLE MATERIALS and EHEALTH
Can any of the company-specific risk be diversified away by investing in both EAGLE MATERIALS and EHEALTH 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 EHEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAGLE MATERIALS and EHEALTH, you can compare the effects of market volatilities on EAGLE MATERIALS and EHEALTH 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 EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAGLE MATERIALS and EHEALTH.
Diversification Opportunities for EAGLE MATERIALS and EHEALTH
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EAGLE and EHEALTH is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding EAGLE MATERIALS and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH 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 EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of EAGLE MATERIALS i.e., EAGLE MATERIALS and EHEALTH go up and down completely randomly.
Pair Corralation between EAGLE MATERIALS and EHEALTH
Assuming the 90 days trading horizon EAGLE MATERIALS is expected to generate 2.34 times less return on investment than EHEALTH. But when comparing it to its historical volatility, EAGLE MATERIALS is 1.75 times less risky than EHEALTH. It trades about 0.17 of its potential returns per unit of risk. EHEALTH is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 456.00 in EHEALTH on August 31, 2024 and sell it today you would earn a total of 99.00 from holding EHEALTH or generate 21.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAGLE MATERIALS vs. EHEALTH
Performance |
| Timeline |
| EAGLE MATERIALS |
| EHEALTH |
EAGLE MATERIALS and EHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAGLE MATERIALS and EHEALTH
The main advantage of trading using opposite EAGLE MATERIALS and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAGLE MATERIALS position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.| EAGLE MATERIALS vs. Burlington Stores | EAGLE MATERIALS vs. Ameriprise Financial | EAGLE MATERIALS vs. BJs Wholesale Club | EAGLE MATERIALS vs. National Retail Properties |
| EHEALTH vs. SIVERS SEMICONDUCTORS AB | EHEALTH vs. Darden Restaurants | EHEALTH vs. Reliance Steel Aluminum | EHEALTH vs. Q2M Managementberatung AG |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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