Correlation Between AM EAGLE and TRAINLINE PLC
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and TRAINLINE PLC 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 AM EAGLE and TRAINLINE PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AM EAGLE OUTFITTERS and TRAINLINE PLC LS, you can compare the effects of market volatilities on AM EAGLE and TRAINLINE PLC 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 AM EAGLE with a short position of TRAINLINE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and TRAINLINE PLC.
Diversification Opportunities for AM EAGLE and TRAINLINE PLC
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AFG and TRAINLINE is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and TRAINLINE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAINLINE PLC LS and AM 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 AM EAGLE OUTFITTERS are associated (or correlated) with TRAINLINE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAINLINE PLC LS has no effect on the direction of AM EAGLE i.e., AM EAGLE and TRAINLINE PLC go up and down completely randomly.
Pair Corralation between AM EAGLE and TRAINLINE PLC
Assuming the 90 days trading horizon AM EAGLE is expected to generate 1.54 times less return on investment than TRAINLINE PLC. But when comparing it to its historical volatility, AM EAGLE OUTFITTERS is 1.03 times less risky than TRAINLINE PLC. It trades about 0.05 of its potential returns per unit of risk. TRAINLINE PLC LS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 291.00 in TRAINLINE PLC LS on August 26, 2024 and sell it today you would earn a total of 189.00 from holding TRAINLINE PLC LS or generate 64.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. TRAINLINE PLC LS
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| TRAINLINE PLC LS |
AM EAGLE and TRAINLINE PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and TRAINLINE PLC
The main advantage of trading using opposite AM EAGLE and TRAINLINE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, TRAINLINE PLC 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 TRAINLINE PLC will offset losses from the drop in TRAINLINE PLC's long position.The idea behind AM EAGLE OUTFITTERS and TRAINLINE PLC LS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TRAINLINE PLC vs. Sumitomo Chemical | TRAINLINE PLC vs. G III Apparel Group | TRAINLINE PLC vs. AM EAGLE OUTFITTERS | TRAINLINE PLC vs. Fidelity National Information |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |