Correlation Between American Eagle and UNIVMUSIC GRPADR050
Can any of the company-specific risk be diversified away by investing in both American Eagle and UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050, you can compare the effects of market volatilities on American Eagle and UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and UNIVMUSIC GRPADR050.
Diversification Opportunities for American Eagle and UNIVMUSIC GRPADR050
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and UNIVMUSIC is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and UNIVMUSIC GRPADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVMUSIC GRPADR050 has no effect on the direction of American Eagle i.e., American Eagle and UNIVMUSIC GRPADR050 go up and down completely randomly.
Pair Corralation between American Eagle and UNIVMUSIC GRPADR050
Assuming the 90 days trading horizon American Eagle Outfitters is expected to generate 1.55 times more return on investment than UNIVMUSIC GRPADR050. However, American Eagle is 1.55 times more volatile than UNIVMUSIC GRPADR050. It trades about 0.02 of its potential returns per unit of risk. UNIVMUSIC GRPADR050 is currently generating about 0.02 per unit of risk. If you would invest 1,460 in American Eagle Outfitters on October 25, 2024 and sell it today you would earn a total of 190.00 from holding American Eagle Outfitters or generate 13.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Eagle Outfitters vs. UNIVMUSIC GRPADR050
Performance |
| Timeline |
| American Eagle Outfitters |
| UNIVMUSIC GRPADR050 |
American Eagle and UNIVMUSIC GRPADR050 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and UNIVMUSIC GRPADR050
The main advantage of trading using opposite American Eagle and UNIVMUSIC GRPADR050 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050 will offset losses from the drop in UNIVMUSIC GRPADR050's long position.| American Eagle vs. FAST RETAIL ADR | American Eagle vs. TRADEDOUBLER AB SK | American Eagle vs. SALESFORCE INC CDR | American Eagle vs. TRADEGATE |
| UNIVMUSIC GRPADR050 vs. Charter Communications | UNIVMUSIC GRPADR050 vs. Warner Music Group | UNIVMUSIC GRPADR050 vs. Superior Plus Corp | UNIVMUSIC GRPADR050 vs. Origin Agritech |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |