Correlation Between American Eagle and Banc Of
Can any of the company-specific risk be diversified away by investing in both American Eagle and Banc Of 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 American Eagle and Banc Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Eagle Outfitters and Banc of California, you can compare the effects of market volatilities on American Eagle and Banc Of 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 American Eagle with a short position of Banc Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Banc Of.
Diversification Opportunities for American Eagle and Banc Of
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Banc is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and Banc of California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banc of California and American Eagle 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 American Eagle Outfitters are associated (or correlated) with Banc Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banc of California has no effect on the direction of American Eagle i.e., American Eagle and Banc Of go up and down completely randomly.
Pair Corralation between American Eagle and Banc Of
Considering the 90-day investment horizon American Eagle is expected to generate 3.63 times less return on investment than Banc Of. In addition to that, American Eagle is 2.99 times more volatile than Banc of California. It trades about 0.01 of its total potential returns per unit of risk. Banc of California is currently generating about 0.1 per unit of volatility. If you would invest 1,944 in Banc of California on December 4, 2024 and sell it today you would earn a total of 562.00 from holding Banc of California or generate 28.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 63.36% |
| Values | Daily Returns |
American Eagle Outfitters vs. Banc of California
Performance |
| Timeline |
| American Eagle Outfitters |
| Banc of California |
American Eagle and Banc Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and Banc Of
The main advantage of trading using opposite American Eagle and Banc Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Banc Of 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 Banc Of will offset losses from the drop in Banc Of's long position.| American Eagle vs. Urban Outfitters | American Eagle vs. Foot Locker | American Eagle vs. Childrens Place | American Eagle vs. Abercrombie Fitch |
| Banc Of vs. Dave Busters Entertainment | Banc Of vs. BCE Inc | Banc Of vs. Federal Home Loan | Banc Of vs. National CineMedia |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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