Correlation Between Accent Resources and American Eagle
Can any of the company-specific risk be diversified away by investing in both Accent Resources 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 Accent Resources and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accent Resources NL and American Eagle Outfitters, you can compare the effects of market volatilities on Accent Resources 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 Accent Resources with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accent Resources and American Eagle.
Diversification Opportunities for Accent Resources and American Eagle
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Accent and American is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Accent Resources NL 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 Accent Resources 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 Accent Resources NL 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 Accent Resources i.e., Accent Resources and American Eagle go up and down completely randomly.
Pair Corralation between Accent Resources and American Eagle
Assuming the 90 days horizon Accent Resources NL is expected to generate 3.27 times more return on investment than American Eagle. However, Accent Resources is 3.27 times more volatile than American Eagle Outfitters. It trades about 0.2 of its potential returns per unit of risk. American Eagle Outfitters is currently generating about -0.06 per unit of risk. If you would invest 1.10 in Accent Resources NL on September 6, 2024 and sell it today you would earn a total of 0.65 from holding Accent Resources NL or generate 59.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accent Resources NL vs. American Eagle Outfitters
Performance |
| Timeline |
| Accent Resources |
| American Eagle Outfitters |
Accent Resources and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accent Resources and American Eagle
The main advantage of trading using opposite Accent Resources and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accent Resources 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.| Accent Resources vs. ALBIS LEASING AG | Accent Resources vs. Harmony Gold Mining | Accent Resources vs. Jacquet Metal Service | Accent Resources vs. UNITED RENTALS |
| American Eagle vs. Lion Biotechnologies | American Eagle vs. Compugroup Medical SE | American Eagle vs. MEDICAL FACILITIES NEW | American Eagle vs. Diamyd Medical AB |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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