Correlation Between AM EAGLE and International Consolidated
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on AM EAGLE and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and International Consolidated.
Diversification Opportunities for AM EAGLE and International Consolidated
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AFG and International is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of AM EAGLE i.e., AM EAGLE and International Consolidated go up and down completely randomly.
Pair Corralation between AM EAGLE and International Consolidated
Assuming the 90 days trading horizon AM EAGLE is expected to generate 7.16 times less return on investment than International Consolidated. In addition to that, AM EAGLE is 1.19 times more volatile than International Consolidated Airlines. It trades about 0.01 of its total potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.12 per unit of volatility. If you would invest 180.00 in International Consolidated Airlines on September 2, 2024 and sell it today you would earn a total of 131.00 from holding International Consolidated Airlines or generate 72.78% 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. International Consolidated Air
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| International Consolidated |
AM EAGLE and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and International Consolidated
The main advantage of trading using opposite AM EAGLE and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| AM EAGLE vs. SIVERS SEMICONDUCTORS AB | AM EAGLE vs. Darden Restaurants | AM EAGLE vs. Reliance Steel Aluminum | AM EAGLE vs. Q2M Managementberatung AG |
| International Consolidated vs. ELECTRONIC ARTS | International Consolidated vs. ON SEMICONDUCTOR | International Consolidated vs. Ultra Clean Holdings | International Consolidated vs. Electronic Arts |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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