Correlation Between Eagle Materials and PICKN PAY

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

By analyzing existing cross correlation between Eagle Materials and PICKN PAY STORES, you can compare the effects of market volatilities on Eagle Materials and PICKN PAY 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 PICKN PAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and PICKN PAY.

Diversification Opportunities for Eagle Materials and PICKN PAY

0.51

Correlation Coefficient

Eagle Materials  PICKN PAY

Very weak diversification

The 3 months correlation between Eagle and PICKN is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES 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 PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of Eagle Materials i.e., Eagle Materials and PICKN PAY go up and down completely randomly.

Pair Corralation between Eagle Materials and PICKN PAY

Assuming the 90 days horizon Eagle Materials is expected to under-perform the PICKN PAY. In addition to that, Eagle Materials is 1.08 times more volatile than PICKN PAY STORES. It trades about -0.03 of its total potential returns per unit of risk. PICKN PAY STORES is currently generating about 0.01 per unit of volatility. If you would invest  124.00  in PICKN PAY STORES on April 24, 2025 and sell it today you would lose (1.00) from holding PICKN PAY STORES or give up 0.81% of portfolio value over 90 days.

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

Eagle Materials  vs.  PICKN PAY STORES

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 nearly stable basic indicators, Eagle Materials is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

PICKN PAY STORES

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Eagle Materials and PICKN PAY

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

The idea behind Eagle Materials and PICKN PAY STORES 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.