Correlation Between AM EAGLE and Yara International
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and Yara International 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 Yara International 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 Yara International ASA, you can compare the effects of market volatilities on AM EAGLE and Yara International 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 Yara International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and Yara International.
Diversification Opportunities for AM EAGLE and Yara International
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AFG and Yara is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and Yara International ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yara International ASA 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 Yara International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yara International ASA has no effect on the direction of AM EAGLE i.e., AM EAGLE and Yara International go up and down completely randomly.
Pair Corralation between AM EAGLE and Yara International
Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to generate 1.47 times more return on investment than Yara International. However, AM EAGLE is 1.47 times more volatile than Yara International ASA. It trades about 0.04 of its potential returns per unit of risk. Yara International ASA is currently generating about -0.02 per unit of risk. If you would invest 1,375 in AM EAGLE OUTFITTERS on September 4, 2024 and sell it today you would earn a total of 545.00 from holding AM EAGLE OUTFITTERS or generate 39.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. Yara International ASA
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| Yara International ASA |
AM EAGLE and Yara International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and Yara International
The main advantage of trading using opposite AM EAGLE and Yara International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, Yara International 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 Yara International will offset losses from the drop in Yara International's long position.The idea behind AM EAGLE OUTFITTERS and Yara International ASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Yara International vs. Corteva | Yara International vs. Corteva | Yara International vs. Nutrien | Yara International vs. The Mosaic |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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