Correlation Between Eagle Materials and CEMEX SAB
Can any of the company-specific risk be diversified away by investing in both Eagle Materials and CEMEX SAB 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 CEMEX SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Materials and CEMEX SAB de, you can compare the effects of market volatilities on Eagle Materials and CEMEX SAB 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 CEMEX SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and CEMEX SAB.
Diversification Opportunities for Eagle Materials and CEMEX SAB
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eagle and CEMEX is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials and CEMEX SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEMEX SAB de 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 CEMEX SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEMEX SAB de has no effect on the direction of Eagle Materials i.e., Eagle Materials and CEMEX SAB go up and down completely randomly.
Pair Corralation between Eagle Materials and CEMEX SAB
Considering the 90-day investment horizon Eagle Materials is expected to under-perform the CEMEX SAB. But the stock apears to be less risky and, when comparing its historical volatility, Eagle Materials is 1.36 times less risky than CEMEX SAB. The stock trades about -0.3 of its potential returns per unit of risk. The CEMEX SAB de is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 55.00 in CEMEX SAB de on October 26, 2024 and sell it today you would lose (1.00) from holding CEMEX SAB de or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Eagle Materials vs. CEMEX SAB de
Performance |
| Timeline |
| Eagle Materials |
| CEMEX SAB de |
Eagle Materials and CEMEX SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Materials and CEMEX SAB
The main advantage of trading using opposite Eagle Materials and CEMEX SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Materials position performs unexpectedly, CEMEX SAB 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 CEMEX SAB will offset losses from the drop in CEMEX SAB's long position.| Eagle Materials vs. Vulcan Materials | Eagle Materials vs. CRH PLC ADR | Eagle Materials vs. Summit Materials | Eagle Materials vs. Cemex SAB de |
| CEMEX SAB vs. Vulcan Materials | CEMEX SAB vs. Martin Marietta Materials | CEMEX SAB vs. Eagle Materials | CEMEX SAB vs. CRH PLC ADR |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |