Correlation Between EAGLE MATERIALS and Enter Air

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

By analyzing existing cross correlation between EAGLE MATERIALS and Enter Air SA, you can compare the effects of market volatilities on EAGLE MATERIALS and Enter Air 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 Enter Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAGLE MATERIALS and Enter Air.

Diversification Opportunities for EAGLE MATERIALS and Enter Air

-0.73

Correlation Coefficient

EAGLE MATERIALS  Enter Air

Pay attention - limited upside

The 3 months correlation between EAGLE and Enter is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding EAGLE MATERIALS and Enter Air SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enter Air SA 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 Enter Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enter Air SA has no effect on the direction of EAGLE MATERIALS i.e., EAGLE MATERIALS and Enter Air go up and down completely randomly.

Pair Corralation between EAGLE MATERIALS and Enter Air

Assuming the 90 days trading horizon EAGLE MATERIALS is expected to under-perform the Enter Air. In addition to that, EAGLE MATERIALS is 1.33 times more volatile than Enter Air SA. It trades about -0.1 of its total potential returns per unit of risk. Enter Air SA is currently generating about 0.14 per unit of volatility. If you would invest  1,124  in Enter Air SA on December 30, 2024 and sell it today you would earn a total of  174.00  from holding Enter Air SA or generate 15.48% return on investment over 90 days.

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

EAGLE MATERIALS  vs.  Enter Air SA

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. In spite of unsteady performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Enter Air SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enter Air SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Enter Air unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EAGLE MATERIALS and Enter Air

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

The idea behind EAGLE MATERIALS and Enter Air SA 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 CEOs Directory module to screen CEOs from public companies around the world.