Correlation Between Eagle Materials and SANOK RUBBER
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Eagle Materials vs. SANOK RUBBER ZY
Performance |
Timeline |
Eagle Materials |
SANOK RUBBER ZY |
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.Eagle Materials vs. Daikin IndustriesLtd | Eagle Materials vs. Vulcan Materials | Eagle Materials vs. Anhui Conch Cement | Eagle Materials vs. Superior Plus Corp |
SANOK RUBBER vs. PT Astra International | SANOK RUBBER vs. Continental Aktiengesellschaft | SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. NMI Holdings |
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.
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