Correlation Between Eagle Materials and Brinks
Can any of the company-specific risk be diversified away by investing in both Eagle Materials and Brinks 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 Brinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Materials and The Brinks, you can compare the effects of market volatilities on Eagle Materials and Brinks 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 Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and Brinks.
Diversification Opportunities for Eagle Materials and Brinks
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eagle and Brinks is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials and The Brinks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks 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 Brinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinks has no effect on the direction of Eagle Materials i.e., Eagle Materials and Brinks go up and down completely randomly.
Pair Corralation between Eagle Materials and Brinks
Assuming the 90 days horizon Eagle Materials is expected to generate 1.66 times less return on investment than Brinks. In addition to that, Eagle Materials is 1.11 times more volatile than The Brinks. It trades about 0.02 of its total potential returns per unit of risk. The Brinks is currently generating about 0.04 per unit of volatility. If you would invest 7,520 in The Brinks on November 8, 2024 and sell it today you would earn a total of 1,230 from holding The Brinks or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Materials vs. The Brinks
Performance |
| Timeline |
| Eagle Materials |
| Brinks |
Eagle Materials and Brinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Materials and Brinks
The main advantage of trading using opposite Eagle Materials and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Materials position performs unexpectedly, Brinks 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 Brinks will offset losses from the drop in Brinks' long position.| Eagle Materials vs. Norwegian Air Shuttle | Eagle Materials vs. DISTRICT METALS | Eagle Materials vs. CORNISH METALS INC | Eagle Materials vs. Delta Air Lines |
| Brinks vs. Firan Technology Group | Brinks vs. Playtech plc | Brinks vs. Sunny Optical Technology | Brinks vs. ASPEN TECHINC DL |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |