Correlation Between PLAYWAY SA and American Eagle
Can any of the company-specific risk be diversified away by investing in both PLAYWAY SA 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 PLAYWAY SA and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYWAY SA ZY 10 and American Eagle Outfitters, you can compare the effects of market volatilities on PLAYWAY SA 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 PLAYWAY SA with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYWAY SA and American Eagle.
Diversification Opportunities for PLAYWAY SA and American Eagle
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PLAYWAY and American is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding PLAYWAY SA ZY 10 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 PLAYWAY SA 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 PLAYWAY SA ZY 10 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 PLAYWAY SA i.e., PLAYWAY SA and American Eagle go up and down completely randomly.
Pair Corralation between PLAYWAY SA and American Eagle
Assuming the 90 days horizon PLAYWAY SA ZY 10 is expected to generate 0.38 times more return on investment than American Eagle. However, PLAYWAY SA ZY 10 is 2.62 times less risky than American Eagle. It trades about 0.05 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about 0.01 per unit of risk. If you would invest 6,370 in PLAYWAY SA ZY 10 on September 13, 2024 and sell it today you would earn a total of 90.00 from holding PLAYWAY SA ZY 10 or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYWAY SA ZY 10 vs. American Eagle Outfitters
Performance |
| Timeline |
| PLAYWAY SA ZY |
| American Eagle Outfitters |
PLAYWAY SA and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYWAY SA and American Eagle
The main advantage of trading using opposite PLAYWAY SA and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYWAY SA 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.| PLAYWAY SA vs. American Eagle Outfitters | PLAYWAY SA vs. Associated British Foods | PLAYWAY SA vs. ASSOC BR FOODS | PLAYWAY SA vs. Meiko Electronics Co |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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