Correlation Between Eagle Materials and MOVIE GAMES
Can any of the company-specific risk be diversified away by investing in both Eagle Materials and MOVIE GAMES 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 MOVIE GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Materials and MOVIE GAMES SA, you can compare the effects of market volatilities on Eagle Materials and MOVIE GAMES 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 MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and MOVIE GAMES.
Diversification Opportunities for Eagle Materials and MOVIE GAMES
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eagle and MOVIE is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA 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 MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of Eagle Materials i.e., Eagle Materials and MOVIE GAMES go up and down completely randomly.
Pair Corralation between Eagle Materials and MOVIE GAMES
Assuming the 90 days horizon Eagle Materials is expected to under-perform the MOVIE GAMES. But the stock apears to be less risky and, when comparing its historical volatility, Eagle Materials is 1.11 times less risky than MOVIE GAMES. The stock trades about -0.36 of its potential returns per unit of risk. The MOVIE GAMES SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 406.00 in MOVIE GAMES SA on November 28, 2024 and sell it today you would lose (1.00) from holding MOVIE GAMES SA or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Materials vs. MOVIE GAMES SA
Performance |
| Timeline |
| Eagle Materials |
| MOVIE GAMES SA |
Eagle Materials and MOVIE GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Materials and MOVIE GAMES
The main advantage of trading using opposite Eagle Materials and MOVIE GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Materials position performs unexpectedly, MOVIE GAMES 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 MOVIE GAMES will offset losses from the drop in MOVIE GAMES's long position.| Eagle Materials vs. PARKEN SPORT ENT | Eagle Materials vs. Transportadora de Gas | Eagle Materials vs. ANTA Sports Products | Eagle Materials vs. SPORT LISBOA E |
| MOVIE GAMES vs. Burlington Stores | MOVIE GAMES vs. NAKED WINES PLC | MOVIE GAMES vs. Treasury Wine Estates | MOVIE GAMES vs. LI METAL P |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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