Correlation Between Eagle Materials and PPC
Can any of the company-specific risk be diversified away by investing in both Eagle Materials and PPC 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 PPC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Materials and PPC Ltd ADR, you can compare the effects of market volatilities on Eagle Materials and PPC 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 PPC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and PPC.
Diversification Opportunities for Eagle Materials and PPC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eagle and PPC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials and PPC Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPC Ltd ADR 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 PPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPC Ltd ADR has no effect on the direction of Eagle Materials i.e., Eagle Materials and PPC go up and down completely randomly.
Pair Corralation between Eagle Materials and PPC
If you would invest 13,892 in Eagle Materials on November 19, 2024 and sell it today you would earn a total of 11,350 from holding Eagle Materials or generate 81.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Eagle Materials vs. PPC Ltd ADR
Performance |
| Timeline |
| Eagle Materials |
| PPC Ltd ADR |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Eagle Materials and PPC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Materials and PPC
The main advantage of trading using opposite Eagle Materials and PPC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Materials position performs unexpectedly, PPC 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 PPC will offset losses from the drop in PPC'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 |
| PPC vs. Wienerberger Baustoffindustrie | PPC vs. China National Building | PPC vs. Anhui Conch Cement | PPC vs. Lafargeholcim Ltd 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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