Correlation Between ONWARD MEDICAL and American Eagle
Can any of the company-specific risk be diversified away by investing in both ONWARD MEDICAL 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 ONWARD MEDICAL and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONWARD MEDICAL BV and American Eagle Outfitters, you can compare the effects of market volatilities on ONWARD MEDICAL 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 ONWARD MEDICAL with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONWARD MEDICAL and American Eagle.
Diversification Opportunities for ONWARD MEDICAL and American Eagle
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ONWARD and American is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ONWARD MEDICAL BV 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 ONWARD MEDICAL 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 ONWARD MEDICAL BV 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 ONWARD MEDICAL i.e., ONWARD MEDICAL and American Eagle go up and down completely randomly.
Pair Corralation between ONWARD MEDICAL and American Eagle
Assuming the 90 days horizon ONWARD MEDICAL BV is expected to generate 1.45 times more return on investment than American Eagle. However, ONWARD MEDICAL is 1.45 times more volatile than American Eagle Outfitters. It trades about -0.28 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.47 per unit of risk. If you would invest 664.00 in ONWARD MEDICAL BV on December 1, 2024 and sell it today you would lose (124.00) from holding ONWARD MEDICAL BV or give up 18.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ONWARD MEDICAL BV vs. American Eagle Outfitters
Performance |
| Timeline |
| ONWARD MEDICAL BV |
| American Eagle Outfitters |
ONWARD MEDICAL and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONWARD MEDICAL and American Eagle
The main advantage of trading using opposite ONWARD MEDICAL and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONWARD MEDICAL 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.| ONWARD MEDICAL vs. Schweizer Electronic AG | ONWARD MEDICAL vs. SINGAPORE AIRLINES | ONWARD MEDICAL vs. Renesas Electronics | ONWARD MEDICAL vs. UMC Electronics Co |
| American Eagle vs. HUTCHISON TELECOMM | American Eagle vs. Chengdu PUTIAN Telecommunications | American Eagle vs. The Yokohama Rubber | American Eagle vs. NEWELL RUBBERMAID |
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 CEOs Directory module to screen CEOs from public companies around the world.
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