Correlation Between American Eagle and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both American Eagle and Apollo Investment 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 Apollo Investment 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 Apollo Investment Corp, you can compare the effects of market volatilities on American Eagle and Apollo Investment 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 Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Apollo Investment.
Diversification Opportunities for American Eagle and Apollo Investment
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Apollo is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp 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 Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of American Eagle i.e., American Eagle and Apollo Investment go up and down completely randomly.
Pair Corralation between American Eagle and Apollo Investment
Assuming the 90 days trading horizon American Eagle is expected to generate 2.07 times less return on investment than Apollo Investment. In addition to that, American Eagle is 2.39 times more volatile than Apollo Investment Corp. It trades about 0.02 of its total potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.1 per unit of volatility. If you would invest 803.00 in Apollo Investment Corp on November 27, 2024 and sell it today you would earn a total of 586.00 from holding Apollo Investment Corp or generate 72.98% 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. Apollo Investment Corp
Performance |
| Timeline |
| American Eagle Outfitters |
| Apollo Investment Corp |
American Eagle and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and Apollo Investment
The main advantage of trading using opposite American Eagle and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Apollo Investment 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 Apollo Investment will offset losses from the drop in Apollo Investment's long position.| American Eagle vs. Gaming and Leisure | American Eagle vs. PLAYWAY SA ZY 10 | American Eagle vs. BJs Restaurants | American Eagle vs. Air Transport Services |
| Apollo Investment vs. BROADPEAK SA EO | Apollo Investment vs. Jacquet Metal Service | Apollo Investment vs. Gaztransport et technigaz | Apollo Investment vs. Air Transport Services |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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