Correlation Between EAGLE MATERIALS and RWE AG
Can any of the company-specific risk be diversified away by investing in both EAGLE MATERIALS and RWE AG 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 RWE AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAGLE MATERIALS and RWE AG, you can compare the effects of market volatilities on EAGLE MATERIALS and RWE AG 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 RWE AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAGLE MATERIALS and RWE AG.
Diversification Opportunities for EAGLE MATERIALS and RWE AG
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EAGLE and RWE is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding EAGLE MATERIALS and RWE AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RWE AG 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 RWE AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RWE AG has no effect on the direction of EAGLE MATERIALS i.e., EAGLE MATERIALS and RWE AG go up and down completely randomly.
Pair Corralation between EAGLE MATERIALS and RWE AG
Assuming the 90 days trading horizon EAGLE MATERIALS is expected to generate 1.2 times more return on investment than RWE AG. However, EAGLE MATERIALS is 1.2 times more volatile than RWE AG. It trades about 0.19 of its potential returns per unit of risk. RWE AG is currently generating about 0.13 per unit of risk. If you would invest 26,600 in EAGLE MATERIALS on September 3, 2024 and sell it today you would earn a total of 2,600 from holding EAGLE MATERIALS or generate 9.77% 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. RWE AG
Performance |
| Timeline |
| EAGLE MATERIALS |
| RWE AG |
EAGLE MATERIALS and RWE AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAGLE MATERIALS and RWE AG
The main advantage of trading using opposite EAGLE MATERIALS and RWE AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAGLE MATERIALS position performs unexpectedly, RWE AG 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 RWE AG will offset losses from the drop in RWE AG's long position.| EAGLE MATERIALS vs. TOTAL GABON | EAGLE MATERIALS vs. Walgreens Boots Alliance | EAGLE MATERIALS vs. Peak Resources Limited |
| RWE AG vs. Warner Music Group | RWE AG vs. CVS Health | RWE AG vs. TITANIUM TRANSPORTGROUP | RWE AG vs. GEAR4MUSIC LS 10 |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |