Correlation Between Compagnie Plastic and Eagle Materials
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Eagle Materials 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 Compagnie Plastic and Eagle Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and Eagle Materials, you can compare the effects of market volatilities on Compagnie Plastic and Eagle Materials 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 Compagnie Plastic with a short position of Eagle Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Eagle Materials.
Diversification Opportunities for Compagnie Plastic and Eagle Materials
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Compagnie and Eagle is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Eagle Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Materials and Compagnie Plastic 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 Compagnie Plastic Omnium are associated (or correlated) with Eagle Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Materials has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Eagle Materials go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Eagle Materials
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to under-perform the Eagle Materials. In addition to that, Compagnie Plastic is 1.22 times more volatile than Eagle Materials. It trades about -0.16 of its total potential returns per unit of risk. Eagle Materials is currently generating about 0.26 per unit of volatility. If you would invest 26,600 in Eagle Materials on August 29, 2024 and sell it today you would earn a total of 3,200 from holding Eagle Materials or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Eagle Materials
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Eagle Materials |
Compagnie Plastic and Eagle Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Eagle Materials
The main advantage of trading using opposite Compagnie Plastic and Eagle Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Eagle Materials 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 Eagle Materials will offset losses from the drop in Eagle Materials' long position.| Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings | Compagnie Plastic vs. Origin Agritech | Compagnie Plastic vs. SIVERS SEMICONDUCTORS AB |
| Eagle Materials vs. Superior Plus Corp | Eagle Materials vs. NMI Holdings | Eagle Materials vs. Origin Agritech | Eagle Materials vs. SIVERS SEMICONDUCTORS AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |