Correlation Between Eagle Materials and Grupo Cementos

Can any of the company-specific risk be diversified away by investing in both Eagle Materials and Grupo Cementos 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 Grupo Cementos into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eagle Materials and Grupo Cementos de, you can compare the effects of market volatilities on Eagle Materials and Grupo Cementos 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 Grupo Cementos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and Grupo Cementos.

Diversification Opportunities for Eagle Materials and Grupo Cementos

-0.06

Correlation Coefficient

Eagle Materials  Grupo Cementos

Good diversification

The 3 months correlation between Eagle and Grupo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials and Grupo Cementos de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Cementos de 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 Grupo Cementos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Cementos de has no effect on the direction of Eagle Materials i.e., Eagle Materials and Grupo Cementos go up and down completely randomly.

Pair Corralation between Eagle Materials and Grupo Cementos

Considering the 90-day investment horizon Eagle Materials is expected to generate 1.08 times more return on investment than Grupo Cementos. However, Eagle Materials is 1.08 times more volatile than Grupo Cementos de. It trades about 0.03 of its potential returns per unit of risk. Grupo Cementos de is currently generating about -0.3 per unit of risk. If you would invest  26,627  in Eagle Materials on February 8, 2024 and sell it today you would earn a total of  206.00  from holding Eagle Materials or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Eagle Materials  vs.  Grupo Cementos de

Eagle Materials

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Materials are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Eagle Materials may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Grupo Cementos de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Cementos de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Grupo Cementos is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Eagle Materials and Grupo Cementos

The main advantage of trading using opposite Eagle Materials and Grupo Cementos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Materials position performs unexpectedly, Grupo Cementos 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 Grupo Cementos will offset losses from the drop in Grupo Cementos' long position.

The idea behind Eagle Materials and Grupo Cementos de pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.