Correlation Between Alstria Office and EAGLE MATERIALS

Can any of the company-specific risk be diversified away by investing in both Alstria Office 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 Alstria Office and EAGLE MATERIALS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between alstria office REIT AG and EAGLE MATERIALS, you can compare the effects of market volatilities on Alstria Office 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 Alstria Office with a short position of EAGLE MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and EAGLE MATERIALS.

Diversification Opportunities for Alstria Office and EAGLE MATERIALS

0.09

Correlation Coefficient

Alstria Office  EAGLE MATERIALS

Significant diversification

The 3 months correlation between Alstria and EAGLE is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and EAGLE MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAGLE MATERIALS and Alstria Office 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 alstria office REIT AG 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 Alstria Office i.e., Alstria Office and EAGLE MATERIALS go up and down completely randomly.

Pair Corralation between Alstria Office and EAGLE MATERIALS

Assuming the 90 days horizon alstria office REIT AG is expected to under-perform the EAGLE MATERIALS. In addition to that, Alstria Office is 6.12 times more volatile than EAGLE MATERIALS. It trades about -0.22 of its total potential returns per unit of risk. EAGLE MATERIALS is currently generating about -0.68 per unit of volatility. If you would invest  27,174  in EAGLE MATERIALS on October 8, 2024 and sell it today you would lose (3,374) from holding EAGLE MATERIALS or give up 12.42% of portfolio value over 90 days.

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

alstria office REIT AG  vs.  EAGLE MATERIALS

alstria office REIT

Risk-Adjusted Performance

0 of 100

Very Weak

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

EAGLE MATERIALS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EAGLE MATERIALS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Alstria Office and EAGLE MATERIALS

The main advantage of trading using opposite Alstria Office and EAGLE MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office 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's long position.

The idea behind alstria office REIT AG 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.