Correlation Between FARM 51 and Eagle Materials
Can any of the company-specific risk be diversified away by investing in both FARM 51 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 FARM 51 and Eagle Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARM 51 GROUP and Eagle Materials, you can compare the effects of market volatilities on FARM 51 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 FARM 51 with a short position of Eagle Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM 51 and Eagle Materials.
Diversification Opportunities for FARM 51 and Eagle Materials
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FARM and Eagle is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding FARM 51 GROUP and Eagle Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Materials and FARM 51 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 FARM 51 GROUP 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 FARM 51 i.e., FARM 51 and Eagle Materials go up and down completely randomly.
Pair Corralation between FARM 51 and Eagle Materials
Assuming the 90 days horizon FARM 51 GROUP is expected to generate 1.35 times more return on investment than Eagle Materials. However, FARM 51 is 1.35 times more volatile than Eagle Materials. It trades about 0.03 of its potential returns per unit of risk. Eagle Materials is currently generating about 0.02 per unit of risk. If you would invest 300.00 in FARM 51 GROUP on November 8, 2024 and sell it today you would earn a total of 34.00 from holding FARM 51 GROUP or generate 11.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM 51 GROUP vs. Eagle Materials
Performance |
| Timeline |
| FARM 51 GROUP |
| Eagle Materials |
FARM 51 and Eagle Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM 51 and Eagle Materials
The main advantage of trading using opposite FARM 51 and Eagle Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM 51 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.| FARM 51 vs. Planet Fitness | FARM 51 vs. Telecom Argentina SA | FARM 51 vs. Cellnex Telecom SA | FARM 51 vs. Zoom Video Communications |
| Eagle Materials vs. Norwegian Air Shuttle | Eagle Materials vs. DISTRICT METALS | Eagle Materials vs. CORNISH METALS INC | Eagle Materials vs. Delta Air Lines |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |