Correlation Between Eagle Materials and DAX Index
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By analyzing existing cross correlation between Eagle Materials and DAX Index, you can compare the effects of market volatilities on Eagle Materials and DAX Index 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 DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and DAX Index.
Diversification Opportunities for Eagle Materials and DAX Index
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eagle and DAX is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index 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 DAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Index has no effect on the direction of Eagle Materials i.e., Eagle Materials and DAX Index go up and down completely randomly.
Pair Corralation between Eagle Materials and DAX Index
Assuming the 90 days horizon Eagle Materials is expected to under-perform the DAX Index. In addition to that, Eagle Materials is 2.68 times more volatile than DAX Index. It trades about -0.27 of its total potential returns per unit of risk. DAX Index is currently generating about 0.48 per unit of volatility. If you would invest 1,921,081 in DAX Index on September 16, 2024 and sell it today you would earn a total of 119,511 from holding DAX Index or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Materials vs. DAX Index
Performance |
| Timeline |
Eagle Materials and DAX Index Volatility Contrast
Predicted Return Density |
| Returns |
Eagle Materials
Pair trading matchups for Eagle Materials
DAX Index
Pair trading matchups for DAX Index
Pair Trading with Eagle Materials and DAX Index
The main advantage of trading using opposite Eagle Materials and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Materials position performs unexpectedly, DAX Index 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 DAX Index will offset losses from the drop in DAX Index's long position.| Eagle Materials vs. Heidelberg Materials AG | Eagle Materials vs. Superior Plus Corp | Eagle Materials vs. NMI Holdings | Eagle Materials vs. SIVERS SEMICONDUCTORS AB |
| DAX Index vs. PLAYTIKA HOLDING DL 01 | DAX Index vs. Eagle Materials | DAX Index vs. Materialise NV | DAX Index vs. JD SPORTS FASH |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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