Correlation Between American Eagle and SunCar Technology
Can any of the company-specific risk be diversified away by investing in both American Eagle and SunCar Technology 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 SunCar Technology 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 SunCar Technology Group, you can compare the effects of market volatilities on American Eagle and SunCar Technology 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 SunCar Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and SunCar Technology.
Diversification Opportunities for American Eagle and SunCar Technology
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and SunCar is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and SunCar Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunCar Technology 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 SunCar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunCar Technology has no effect on the direction of American Eagle i.e., American Eagle and SunCar Technology go up and down completely randomly.
Pair Corralation between American Eagle and SunCar Technology
Considering the 90-day investment horizon American Eagle is expected to generate 18.91 times less return on investment than SunCar Technology. But when comparing it to its historical volatility, American Eagle Outfitters is 8.36 times less risky than SunCar Technology. It trades about 0.05 of its potential returns per unit of risk. SunCar Technology Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5.73 in SunCar Technology Group on August 31, 2024 and sell it today you would earn a total of 29.27 from holding SunCar Technology Group or generate 510.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.44% |
| Values | Daily Returns |
American Eagle Outfitters vs. SunCar Technology Group
Performance |
| Timeline |
| American Eagle Outfitters |
| SunCar Technology |
American Eagle and SunCar Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and SunCar Technology
The main advantage of trading using opposite American Eagle and SunCar Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, SunCar Technology 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 SunCar Technology will offset losses from the drop in SunCar Technology's long position.| American Eagle vs. Urban Outfitters | American Eagle vs. Foot Locker | American Eagle vs. Childrens Place | American Eagle vs. Abercrombie Fitch |
| SunCar Technology vs. Nascent Wine | SunCar Technology vs. Teleflex Incorporated | SunCar Technology vs. Oatly Group AB | SunCar Technology vs. Willamette Valley Vineyards |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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