Correlation Between Eagle Materials and SANOK RUBBER

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Eagle Materials and SANOK RUBBER 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 SANOK RUBBER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Materials and SANOK RUBBER ZY, you can compare the effects of market volatilities on Eagle Materials and SANOK RUBBER 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 SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and SANOK RUBBER.

Diversification Opportunities for Eagle Materials and SANOK RUBBER

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Eagle and SANOK is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of Eagle Materials i.e., Eagle Materials and SANOK RUBBER go up and down completely randomly.

Pair Corralation between Eagle Materials and SANOK RUBBER

Assuming the 90 days horizon Eagle Materials is expected to generate 1.18 times less return on investment than SANOK RUBBER. But when comparing it to its historical volatility, Eagle Materials is 1.46 times less risky than SANOK RUBBER. It trades about 0.1 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  167.00  in SANOK RUBBER ZY on August 29, 2024 and sell it today you would earn a total of  267.00  from holding SANOK RUBBER ZY or generate 159.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Eagle Materials  vs.  SANOK RUBBER ZY

 Performance 
       Timeline  
Eagle Materials 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Materials are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Eagle Materials reported solid returns over the last few months and may actually be approaching a breakup point.
SANOK RUBBER ZY 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SANOK RUBBER reported solid returns over the last few months and may actually be approaching a breakup point.

Eagle Materials and SANOK RUBBER Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eagle Materials and SANOK RUBBER

The main advantage of trading using opposite Eagle Materials and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Materials position performs unexpectedly, SANOK RUBBER 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 SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.
The idea behind Eagle Materials and SANOK RUBBER ZY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

Other Complementary Tools

Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.