Correlation Between Elfun Trusts and EAGLE

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

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

Diversification Opportunities for Elfun Trusts and EAGLE

0.13

Correlation Coefficient

Elfun Trusts  EAGLE

Average diversification

The 3 months correlation between Elfun and EAGLE is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and EAGLE MATERIALS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAGLE MATERIALS INC and Elfun Trusts 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 Elfun Trusts Elfun are associated (or correlated) with EAGLE. 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 INC has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and EAGLE go up and down completely randomly.

Pair Corralation between Elfun Trusts and EAGLE

Assuming the 90 days horizon Elfun Trusts Elfun is expected to under-perform the EAGLE. In addition to that, Elfun Trusts is 1.1 times more volatile than EAGLE MATERIALS INC. It trades about -0.14 of its total potential returns per unit of risk. EAGLE MATERIALS INC is currently generating about -0.01 per unit of volatility. If you would invest  8,508  in EAGLE MATERIALS INC on December 25, 2024 and sell it today you would lose (110.00) from holding EAGLE MATERIALS INC or give up 1.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Elfun Trusts Elfun  vs.  EAGLE MATERIALS INC

Elfun Trusts Elfun

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elfun Trusts Elfun has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

EAGLE MATERIALS INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days EAGLE MATERIALS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, EAGLE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Elfun Trusts and EAGLE

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

The idea behind Elfun Trusts Elfun and EAGLE MATERIALS INC 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.