Correlation Between American Eagle and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both American Eagle and Diamyd Medical 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 Diamyd Medical 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 Diamyd Medical AB, you can compare the effects of market volatilities on American Eagle and Diamyd Medical 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 Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Diamyd Medical.
Diversification Opportunities for American Eagle and Diamyd Medical
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Diamyd is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and Diamyd Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamyd Medical AB 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 Diamyd Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamyd Medical AB has no effect on the direction of American Eagle i.e., American Eagle and Diamyd Medical go up and down completely randomly.
Pair Corralation between American Eagle and Diamyd Medical
Assuming the 90 days trading horizon American Eagle Outfitters is expected to under-perform the Diamyd Medical. But the stock apears to be less risky and, when comparing its historical volatility, American Eagle Outfitters is 1.21 times less risky than Diamyd Medical. The stock trades about -0.08 of its potential returns per unit of risk. The Diamyd Medical AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 139.00 in Diamyd Medical AB on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Diamyd Medical AB or generate 4.32% 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. Diamyd Medical AB
Performance |
| Timeline |
| American Eagle Outfitters |
| Diamyd Medical AB |
American Eagle and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and Diamyd Medical
The main advantage of trading using opposite American Eagle and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Diamyd Medical 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 Diamyd Medical will offset losses from the drop in Diamyd Medical's long position.| American Eagle vs. GALENA MINING LTD | American Eagle vs. ARDAGH METAL PACDL 0001 | American Eagle vs. SLR Investment Corp | American Eagle vs. MAGNUM MINING EXP |
| Diamyd Medical vs. Charter Communications | Diamyd Medical vs. STORE ELECTRONIC | Diamyd Medical vs. Hemisphere Energy Corp | Diamyd Medical vs. ecotel communication ag |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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