Correlation Between EPlay Digital and Eagle Materials

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

By analyzing existing cross correlation between ePlay Digital and Eagle Materials, you can compare the effects of market volatilities on EPlay Digital 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 EPlay Digital with a short position of Eagle Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPlay Digital and Eagle Materials.

Diversification Opportunities for EPlay Digital and Eagle Materials

0.0

Correlation Coefficient

EPlay Digital  Eagle Materials

Pay attention - limited upside

The 3 months correlation between EPlay and Eagle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ePlay Digital and Eagle Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Materials and EPlay Digital 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 ePlay Digital 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 EPlay Digital i.e., EPlay Digital and Eagle Materials go up and down completely randomly.

Pair Corralation between EPlay Digital and Eagle Materials

If you would invest  0.10  in ePlay Digital on December 29, 2024 and sell it today you would earn a total of  0.00  from holding ePlay Digital or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

ePlay Digital  vs.  Eagle Materials

ePlay Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days ePlay Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, EPlay Digital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Eagle Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eagle Materials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with EPlay Digital and Eagle Materials

The main advantage of trading using opposite EPlay Digital and Eagle Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPlay Digital 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.

The idea behind ePlay Digital and Eagle Materials 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.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.