Correlation Between Wienerberger Baustoffindustri and Eagle Materials
Can any of the company-specific risk be diversified away by investing in both Wienerberger Baustoffindustri 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 Wienerberger Baustoffindustri and Eagle Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wienerberger Baustoffindustrie and Eagle Materials, you can compare the effects of market volatilities on Wienerberger Baustoffindustri 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 Wienerberger Baustoffindustri with a short position of Eagle Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wienerberger Baustoffindustri and Eagle Materials.
Diversification Opportunities for Wienerberger Baustoffindustri and Eagle Materials
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wienerberger and Eagle is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Wienerberger Baustoffindustrie and Eagle Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Materials and Wienerberger Baustoffindustri 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 Wienerberger Baustoffindustrie 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 Wienerberger Baustoffindustri i.e., Wienerberger Baustoffindustri and Eagle Materials go up and down completely randomly.
Pair Corralation between Wienerberger Baustoffindustri and Eagle Materials
Assuming the 90 days horizon Wienerberger Baustoffindustrie is expected to under-perform the Eagle Materials. In addition to that, Wienerberger Baustoffindustri is 1.98 times more volatile than Eagle Materials. It trades about -0.02 of its total potential returns per unit of risk. Eagle Materials is currently generating about 0.21 per unit of volatility. If you would invest 28,292 in Eagle Materials on August 30, 2024 and sell it today you would earn a total of 2,301 from holding Eagle Materials or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wienerberger Baustoffindustrie vs. Eagle Materials
Performance |
| Timeline |
| Wienerberger Baustoffindustri |
| Eagle Materials |
Wienerberger Baustoffindustri and Eagle Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wienerberger Baustoffindustri and Eagle Materials
The main advantage of trading using opposite Wienerberger Baustoffindustri and Eagle Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wienerberger Baustoffindustri 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.| Wienerberger Baustoffindustri vs. Xinyi Glass Holdings | Wienerberger Baustoffindustri vs. CEMATRIX | Wienerberger Baustoffindustri vs. CEMEX SAB de | Wienerberger Baustoffindustri vs. China National Building |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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