Correlation Between AM EAGLE and Entravision Communications
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and Entravision Communications 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 Entravision Communications 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 Entravision Communications, you can compare the effects of market volatilities on AM EAGLE and Entravision Communications 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 Entravision Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and Entravision Communications.
Diversification Opportunities for AM EAGLE and Entravision Communications
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AFG and Entravision is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and Entravision Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entravision Communications 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 Entravision Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entravision Communications has no effect on the direction of AM EAGLE i.e., AM EAGLE and Entravision Communications go up and down completely randomly.
Pair Corralation between AM EAGLE and Entravision Communications
Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to under-perform the Entravision Communications. But the stock apears to be less risky and, when comparing its historical volatility, AM EAGLE OUTFITTERS is 1.41 times less risky than Entravision Communications. The stock trades about -0.1 of its potential returns per unit of risk. The Entravision Communications is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 208.00 in Entravision Communications on August 30, 2024 and sell it today you would earn a total of 28.00 from holding Entravision Communications or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. Entravision Communications
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| Entravision Communications |
AM EAGLE and Entravision Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and Entravision Communications
The main advantage of trading using opposite AM EAGLE and Entravision Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, Entravision Communications 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 Entravision Communications will offset losses from the drop in Entravision Communications' long position.| AM EAGLE vs. Apple Inc | AM EAGLE vs. Apple Inc | AM EAGLE vs. Superior Plus Corp | AM EAGLE vs. SIVERS SEMICONDUCTORS AB |
| Entravision Communications vs. VIVENDI UNSPONARD EO | Entravision Communications vs. Superior Plus Corp | Entravision Communications vs. NMI Holdings | Entravision Communications vs. SIVERS SEMICONDUCTORS AB |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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