Correlation Between AUTOHOME INC and American Eagle
Can any of the company-specific risk be diversified away by investing in both AUTOHOME INC 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 AUTOHOME INC and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUTOHOME INC A and American Eagle Outfitters, you can compare the effects of market volatilities on AUTOHOME INC 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 AUTOHOME INC with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUTOHOME INC and American Eagle.
Diversification Opportunities for AUTOHOME INC and American Eagle
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AUTOHOME and American is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding AUTOHOME INC A 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 AUTOHOME INC 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 AUTOHOME INC A 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 AUTOHOME INC i.e., AUTOHOME INC and American Eagle go up and down completely randomly.
Pair Corralation between AUTOHOME INC and American Eagle
Assuming the 90 days trading horizon AUTOHOME INC A is expected to generate 1.92 times more return on investment than American Eagle. However, AUTOHOME INC is 1.92 times more volatile than American Eagle Outfitters. It trades about 0.04 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.11 per unit of risk. If you would invest 605.00 in AUTOHOME INC A on November 3, 2024 and sell it today you would earn a total of 10.00 from holding AUTOHOME INC A or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUTOHOME INC A vs. American Eagle Outfitters
Performance |
| Timeline |
| AUTOHOME INC A |
| American Eagle Outfitters |
AUTOHOME INC and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUTOHOME INC and American Eagle
The main advantage of trading using opposite AUTOHOME INC and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUTOHOME INC 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.| AUTOHOME INC vs. Caseys General Stores | AUTOHOME INC vs. COSTCO WHOLESALE CDR | AUTOHOME INC vs. Cogent Communications Holdings | AUTOHOME INC vs. H2O Retailing |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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