Correlation Between American Eagle and Delek Drilling
Can any of the company-specific risk be diversified away by investing in both American Eagle and Delek Drilling 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 Delek Drilling 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 Delek Drilling , you can compare the effects of market volatilities on American Eagle and Delek Drilling 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 Delek Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Delek Drilling.
Diversification Opportunities for American Eagle and Delek Drilling
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Delek is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and Delek Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Drilling 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 Delek Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Drilling has no effect on the direction of American Eagle i.e., American Eagle and Delek Drilling go up and down completely randomly.
Pair Corralation between American Eagle and Delek Drilling
Considering the 90-day investment horizon American Eagle Outfitters is expected to under-perform the Delek Drilling. In addition to that, American Eagle is 1.8 times more volatile than Delek Drilling . It trades about -0.02 of its total potential returns per unit of risk. Delek Drilling is currently generating about 0.17 per unit of volatility. If you would invest 296.00 in Delek Drilling on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Delek Drilling or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. Delek Drilling
Performance |
| Timeline |
| American Eagle Outfitters |
| Delek Drilling |
American Eagle and Delek Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and Delek Drilling
The main advantage of trading using opposite American Eagle and Delek Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Delek Drilling 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 Delek Drilling will offset losses from the drop in Delek Drilling's long position.| American Eagle vs. Capri Holdings | American Eagle vs. Movado Group | American Eagle vs. Tapestry | American Eagle vs. Brilliant Earth Group |
| Delek Drilling vs. Permian Resources | Delek Drilling vs. Devon Energy | Delek Drilling vs. EOG Resources | Delek Drilling vs. Coterra Energy |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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