Correlation Between Eagle Materials and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Eagle Materials and Superior Plus 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 Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Materials and Superior Plus Corp, you can compare the effects of market volatilities on Eagle Materials and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and Superior Plus.
Diversification Opportunities for Eagle Materials and Superior Plus
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eagle and Superior is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Eagle Materials i.e., Eagle Materials and Superior Plus go up and down completely randomly.
Pair Corralation between Eagle Materials and Superior Plus
Assuming the 90 days horizon Eagle Materials is expected to generate 0.92 times more return on investment than Superior Plus. However, Eagle Materials is 1.08 times less risky than Superior Plus. It trades about 0.1 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.02 per unit of risk. If you would invest 12,353 in Eagle Materials on August 29, 2024 and sell it today you would earn a total of 17,247 from holding Eagle Materials or generate 139.62% 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. Superior Plus Corp
Performance |
| Timeline |
| Eagle Materials |
| Superior Plus Corp |
Eagle Materials and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Materials and Superior Plus
The main advantage of trading using opposite Eagle Materials and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Materials position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Eagle Materials vs. Daikin IndustriesLtd | Eagle Materials vs. Vulcan Materials | Eagle Materials vs. Anhui Conch Cement | Eagle Materials vs. Superior Plus Corp |
| Superior Plus vs. Meli Hotels International | Superior Plus vs. InterContinental Hotels Group | Superior Plus vs. PT Bank Maybank | Superior Plus vs. Pebblebrook Hotel Trust |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |