Correlation Between AM EAGLE and MICRONIC MYDATA
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and MICRONIC MYDATA 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 MICRONIC MYDATA 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 MICRONIC MYDATA, you can compare the effects of market volatilities on AM EAGLE and MICRONIC MYDATA 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 MICRONIC MYDATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and MICRONIC MYDATA.
Diversification Opportunities for AM EAGLE and MICRONIC MYDATA
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between AFG and MICRONIC is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and MICRONIC MYDATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICRONIC MYDATA 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 MICRONIC MYDATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICRONIC MYDATA has no effect on the direction of AM EAGLE i.e., AM EAGLE and MICRONIC MYDATA go up and down completely randomly.
Pair Corralation between AM EAGLE and MICRONIC MYDATA
Assuming the 90 days trading horizon AM EAGLE is expected to generate 1.04 times less return on investment than MICRONIC MYDATA. In addition to that, AM EAGLE is 1.1 times more volatile than MICRONIC MYDATA. It trades about 0.07 of its total potential returns per unit of risk. MICRONIC MYDATA is currently generating about 0.08 per unit of volatility. If you would invest 1,848 in MICRONIC MYDATA on September 2, 2024 and sell it today you would earn a total of 1,508 from holding MICRONIC MYDATA or generate 81.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. MICRONIC MYDATA
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| MICRONIC MYDATA |
AM EAGLE and MICRONIC MYDATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and MICRONIC MYDATA
The main advantage of trading using opposite AM EAGLE and MICRONIC MYDATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, MICRONIC MYDATA 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 MICRONIC MYDATA will offset losses from the drop in MICRONIC MYDATA'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 |
| MICRONIC MYDATA vs. SIVERS SEMICONDUCTORS AB | MICRONIC MYDATA vs. Darden Restaurants | MICRONIC MYDATA vs. Reliance Steel Aluminum | MICRONIC MYDATA vs. Q2M Managementberatung AG |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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