Correlation Between Eagle Materials and MAGNUM MINING

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

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

Diversification Opportunities for Eagle Materials and MAGNUM MINING

0.0

Correlation Coefficient

Eagle Materials  MAGNUM MINING

Pay attention - limited upside

The 3 months correlation between Eagle and MAGNUM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials and MAGNUM MINING EXP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNUM MINING EXP 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 MAGNUM MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNUM MINING EXP has no effect on the direction of Eagle Materials i.e., Eagle Materials and MAGNUM MINING go up and down completely randomly.

Pair Corralation between Eagle Materials and MAGNUM MINING

If you would invest  21,978  in Eagle Materials on September 3, 2024 and sell it today you would earn a total of  7,022  from holding Eagle Materials or generate 31.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Eagle Materials  vs.  MAGNUM MINING EXP

Eagle Materials

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Materials are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Eagle Materials reported solid returns over the last few months and may actually be approaching a breakup point.

MAGNUM MINING EXP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAGNUM MINING EXP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MAGNUM MINING is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Eagle Materials and MAGNUM MINING

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

The idea behind Eagle Materials and MAGNUM MINING EXP 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.