Correlation Between EAGLE MATERIALS and WEIQIAO TEXTILE

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

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

Diversification Opportunities for EAGLE MATERIALS and WEIQIAO TEXTILE

0.0

Correlation Coefficient

EAGLE MATERIALS  WEIQIAO TEXTILE

Pay attention - limited upside

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

Pair Corralation between EAGLE MATERIALS and WEIQIAO TEXTILE

If you would invest  0.00  in WEIQIAO TEXTILE H on October 17, 2024 and sell it today you would earn a total of  0.00  from holding WEIQIAO TEXTILE H or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.88%
Values	Daily Returns

EAGLE MATERIALS  vs.  WEIQIAO TEXTILE H

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

WEIQIAO TEXTILE H

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WEIQIAO TEXTILE H has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, WEIQIAO TEXTILE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with EAGLE MATERIALS and WEIQIAO TEXTILE

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

The idea behind EAGLE MATERIALS and WEIQIAO TEXTILE H 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.