Correlation Between EAGLE MATERIALS and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both EAGLE MATERIALS and Samsung Electronics 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 Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAGLE MATERIALS and Samsung Electronics Co, you can compare the effects of market volatilities on EAGLE MATERIALS and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAGLE MATERIALS and Samsung Electronics.
Diversification Opportunities for EAGLE MATERIALS and Samsung Electronics
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EAGLE and Samsung is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding EAGLE MATERIALS and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of EAGLE MATERIALS i.e., EAGLE MATERIALS and Samsung Electronics go up and down completely randomly.
Pair Corralation between EAGLE MATERIALS and Samsung Electronics
Assuming the 90 days trading horizon EAGLE MATERIALS is expected to generate 1.03 times more return on investment than Samsung Electronics. However, EAGLE MATERIALS is 1.03 times more volatile than Samsung Electronics Co. It trades about 0.08 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.0 per unit of risk. If you would invest 12,365 in EAGLE MATERIALS on September 23, 2024 and sell it today you would earn a total of 11,835 from holding EAGLE MATERIALS or generate 95.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAGLE MATERIALS vs. Samsung Electronics Co
Performance |
| Timeline |
| EAGLE MATERIALS |
| Samsung Electronics |
EAGLE MATERIALS and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAGLE MATERIALS and Samsung Electronics
The main advantage of trading using opposite EAGLE MATERIALS and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAGLE MATERIALS position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc |
| Samsung Electronics vs. Materialise NV | Samsung Electronics vs. EAGLE MATERIALS | Samsung Electronics vs. Jupiter Fund Management | Samsung Electronics vs. 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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