Correlation Between Grupo Cementos and Eagle Materials
Can any of the company-specific risk be diversified away by investing in both Grupo Cementos 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 Grupo Cementos and Eagle Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Cementos de and Eagle Materials, you can compare the effects of market volatilities on Grupo Cementos 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 Grupo Cementos with a short position of Eagle Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Cementos and Eagle Materials.
Diversification Opportunities for Grupo Cementos and Eagle Materials
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grupo and Eagle is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Cementos de and Eagle Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Materials and Grupo Cementos 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 Grupo Cementos de 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 Grupo Cementos i.e., Grupo Cementos and Eagle Materials go up and down completely randomly.
Pair Corralation between Grupo Cementos and Eagle Materials
Assuming the 90 days horizon Grupo Cementos de is expected to under-perform the Eagle Materials. But the pink sheet apears to be less risky and, when comparing its historical volatility, Grupo Cementos de is 1.02 times less risky than Eagle Materials. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Eagle Materials is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 22,939 in Eagle Materials on September 3, 2024 and sell it today you would earn a total of 7,426 from holding Eagle Materials or generate 32.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Cementos de vs. Eagle Materials
Performance |
| Timeline |
| Grupo Cementos de |
| Eagle Materials |
Grupo Cementos and Eagle Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Cementos and Eagle Materials
The main advantage of trading using opposite Grupo Cementos and Eagle Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Cementos 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.| Grupo Cementos vs. Eagle Materials | Grupo Cementos vs. Cementos Pacasmayo SAA | Grupo Cementos vs. James Hardie Industries | Grupo Cementos vs. United States Lime |
| Eagle Materials vs. Vulcan Materials | Eagle Materials vs. CRH PLC ADR | Eagle Materials vs. Summit Materials | Eagle Materials vs. Cemex SAB de |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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