Correlation Between American Eagle and 2G ENERGY
Can any of the company-specific risk be diversified away by investing in both American Eagle and 2G ENERGY 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 2G ENERGY 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 2G ENERGY , you can compare the effects of market volatilities on American Eagle and 2G ENERGY 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 2G ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and 2G ENERGY.
Diversification Opportunities for American Eagle and 2G ENERGY
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and 2GB is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and 2G ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2G ENERGY 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 2G ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2G ENERGY has no effect on the direction of American Eagle i.e., American Eagle and 2G ENERGY go up and down completely randomly.
Pair Corralation between American Eagle and 2G ENERGY
Assuming the 90 days horizon American Eagle Outfitters is expected to under-perform the 2G ENERGY. In addition to that, American Eagle is 1.02 times more volatile than 2G ENERGY . It trades about -0.07 of its total potential returns per unit of risk. 2G ENERGY is currently generating about 0.0 per unit of volatility. If you would invest 2,543 in 2G ENERGY on November 28, 2024 and sell it today you would lose (168.00) from holding 2G ENERGY or give up 6.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. 2G ENERGY
Performance |
| Timeline |
| American Eagle Outfitters |
| 2G ENERGY |
American Eagle and 2G ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and 2G ENERGY
The main advantage of trading using opposite American Eagle and 2G ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, 2G ENERGY 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 2G ENERGY will offset losses from the drop in 2G ENERGY's long position.| American Eagle vs. Ares Management Corp | American Eagle vs. Brockhaus Capital Management | American Eagle vs. CeoTronics AG | American Eagle vs. Jupiter Fund Management |
| 2G ENERGY vs. COFCO Joycome Foods | 2G ENERGY vs. Axfood AB | 2G ENERGY vs. SLR Investment Corp | 2G ENERGY vs. CONAGRA FOODS |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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