Correlation Between HF FOODS and American Eagle
Can any of the company-specific risk be diversified away by investing in both HF FOODS and American 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 HF FOODS and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HF FOODS GRP and American Eagle Outfitters, you can compare the effects of market volatilities on HF FOODS and American 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 HF FOODS with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and American Eagle.
Diversification Opportunities for HF FOODS and American Eagle
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between 3GX and American is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and American Eagle Outfitters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Eagle Outfitters and HF FOODS 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 HF FOODS GRP are associated (or correlated) with American Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Eagle Outfitters has no effect on the direction of HF FOODS i.e., HF FOODS and American Eagle go up and down completely randomly.
Pair Corralation between HF FOODS and American Eagle
Assuming the 90 days horizon HF FOODS is expected to generate 1.39 times less return on investment than American Eagle. In addition to that, HF FOODS is 1.39 times more volatile than American Eagle Outfitters. It trades about 0.02 of its total potential returns per unit of risk. American Eagle Outfitters is currently generating about 0.03 per unit of volatility. If you would invest 1,397 in American Eagle Outfitters on September 3, 2024 and sell it today you would earn a total of 353.00 from holding American Eagle Outfitters or generate 25.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF FOODS GRP vs. American Eagle Outfitters
Performance |
| Timeline |
| HF FOODS GRP |
| American Eagle Outfitters |
HF FOODS and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and American Eagle
The main advantage of trading using opposite HF FOODS and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, American 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 American Eagle will offset losses from the drop in American Eagle's long position.| HF FOODS vs. SHIP HEALTHCARE HLDGINC | HF FOODS vs. EEDUCATION ALBERT AB | HF FOODS vs. DEVRY EDUCATION GRP | HF FOODS vs. Grand Canyon Education |
| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc |
Check out your portfolio center.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |