Correlation Between AM EAGLE and CODERE ONLINE
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and CODERE ONLINE 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 CODERE ONLINE 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 CODERE ONLINE LUX, you can compare the effects of market volatilities on AM EAGLE and CODERE ONLINE 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 CODERE ONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and CODERE ONLINE.
Diversification Opportunities for AM EAGLE and CODERE ONLINE
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AFG and CODERE is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and CODERE ONLINE LUX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CODERE ONLINE LUX 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 CODERE ONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CODERE ONLINE LUX has no effect on the direction of AM EAGLE i.e., AM EAGLE and CODERE ONLINE go up and down completely randomly.
Pair Corralation between AM EAGLE and CODERE ONLINE
Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to under-perform the CODERE ONLINE. But the stock apears to be less risky and, when comparing its historical volatility, AM EAGLE OUTFITTERS is 1.74 times less risky than CODERE ONLINE. The stock trades about -0.19 of its potential returns per unit of risk. The CODERE ONLINE LUX is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 725.00 in CODERE ONLINE LUX on August 27, 2024 and sell it today you would lose (5.00) from holding CODERE ONLINE LUX or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. CODERE ONLINE LUX
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| CODERE ONLINE LUX |
AM EAGLE and CODERE ONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and CODERE ONLINE
The main advantage of trading using opposite AM EAGLE and CODERE ONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, CODERE ONLINE 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 CODERE ONLINE will offset losses from the drop in CODERE ONLINE's long position.The idea behind AM EAGLE OUTFITTERS and CODERE ONLINE LUX 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.| CODERE ONLINE vs. Evolution AB | CODERE ONLINE vs. Scientific Games | CODERE ONLINE vs. International Game Technology |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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