Correlation Between AM EAGLE and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH, you can compare the effects of market volatilities on AM EAGLE and FEMALE HEALTH 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 FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and FEMALE HEALTH.
Diversification Opportunities for AM EAGLE and FEMALE HEALTH
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AFG and FEMALE is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of AM EAGLE i.e., AM EAGLE and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between AM EAGLE and FEMALE HEALTH
Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to under-perform the FEMALE HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, AM EAGLE OUTFITTERS is 2.51 times less risky than FEMALE HEALTH. The stock trades about -0.16 of its potential returns per unit of risk. The FEMALE HEALTH is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 65.00 in FEMALE HEALTH on October 11, 2024 and sell it today you would earn a total of 4.00 from holding FEMALE HEALTH or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. FEMALE HEALTH
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| FEMALE HEALTH |
AM EAGLE and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and FEMALE HEALTH
The main advantage of trading using opposite AM EAGLE and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, FEMALE HEALTH 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.| AM EAGLE vs. ARISTOCRAT LEISURE | AM EAGLE vs. PLAYMATES TOYS | AM EAGLE vs. Applied Materials | AM EAGLE vs. Heidelberg Materials AG |
| FEMALE HEALTH vs. PennantPark Investment | FEMALE HEALTH vs. AM EAGLE OUTFITTERS | FEMALE HEALTH vs. Scottish Mortgage Investment | FEMALE HEALTH vs. HK Electric Investments |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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