Correlation Between American Eagle and SunOpta
Can any of the company-specific risk be diversified away by investing in both American Eagle and SunOpta 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 SunOpta 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 SunOpta, you can compare the effects of market volatilities on American Eagle and SunOpta 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 SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and SunOpta.
Diversification Opportunities for American Eagle and SunOpta
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and SunOpta is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of American Eagle i.e., American Eagle and SunOpta go up and down completely randomly.
Pair Corralation between American Eagle and SunOpta
Considering the 90-day investment horizon American Eagle is expected to generate 12.6 times less return on investment than SunOpta. In addition to that, American Eagle is 1.13 times more volatile than SunOpta. It trades about 0.02 of its total potential returns per unit of risk. SunOpta is currently generating about 0.32 per unit of volatility. If you would invest 675.00 in SunOpta on September 3, 2024 and sell it today you would earn a total of 100.00 from holding SunOpta or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. SunOpta
Performance |
| Timeline |
| American Eagle Outfitters |
| SunOpta |
American Eagle and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and SunOpta
The main advantage of trading using opposite American Eagle and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.| American Eagle vs. Ross Stores | American Eagle vs. Childrens Place | American Eagle vs. Buckle Inc | American Eagle vs. Guess Inc |
| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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