Correlation Between EAGLE MATERIALS and Mitsubishi Gas
Can any of the company-specific risk be diversified away by investing in both EAGLE MATERIALS and Mitsubishi Gas 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 Mitsubishi Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAGLE MATERIALS and Mitsubishi Gas Chemical, you can compare the effects of market volatilities on EAGLE MATERIALS and Mitsubishi Gas 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 Mitsubishi Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAGLE MATERIALS and Mitsubishi Gas.
Diversification Opportunities for EAGLE MATERIALS and Mitsubishi Gas
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EAGLE and Mitsubishi is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding EAGLE MATERIALS and Mitsubishi Gas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Gas Chemical 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 Mitsubishi Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Gas Chemical has no effect on the direction of EAGLE MATERIALS i.e., EAGLE MATERIALS and Mitsubishi Gas go up and down completely randomly.
Pair Corralation between EAGLE MATERIALS and Mitsubishi Gas
Assuming the 90 days trading horizon EAGLE MATERIALS is expected to generate 1.27 times more return on investment than Mitsubishi Gas. However, EAGLE MATERIALS is 1.27 times more volatile than Mitsubishi Gas Chemical. It trades about 0.17 of its potential returns per unit of risk. Mitsubishi Gas Chemical is currently generating about 0.09 per unit of risk. If you would invest 24,000 in EAGLE MATERIALS on October 24, 2024 and sell it today you would earn a total of 1,000.00 from holding EAGLE MATERIALS or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAGLE MATERIALS vs. Mitsubishi Gas Chemical
Performance |
| Timeline |
| EAGLE MATERIALS |
| Mitsubishi Gas Chemical |
EAGLE MATERIALS and Mitsubishi Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAGLE MATERIALS and Mitsubishi Gas
The main advantage of trading using opposite EAGLE MATERIALS and Mitsubishi Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAGLE MATERIALS position performs unexpectedly, Mitsubishi Gas 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 Mitsubishi Gas will offset losses from the drop in Mitsubishi Gas' long position.| EAGLE MATERIALS vs. ARDAGH METAL PACDL 0001 | EAGLE MATERIALS vs. MAGNUM MINING EXP | EAGLE MATERIALS vs. Stag Industrial | EAGLE MATERIALS vs. Carnegie Clean Energy |
| Mitsubishi Gas vs. Applied Materials | Mitsubishi Gas vs. Vienna Insurance Group | Mitsubishi Gas vs. EAGLE MATERIALS | Mitsubishi Gas vs. Compagnie Plastic Omnium |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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