Correlation Between American Eagle and IRONVELD PLC
Can any of the company-specific risk be diversified away by investing in both American Eagle and IRONVELD PLC 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 American Eagle and IRONVELD PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Eagle Outfitters and IRONVELD PLC LS, you can compare the effects of market volatilities on American Eagle and IRONVELD PLC 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 American Eagle with a short position of IRONVELD PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and IRONVELD PLC.
Diversification Opportunities for American Eagle and IRONVELD PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and IRONVELD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and IRONVELD PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRONVELD PLC LS and American 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 American Eagle Outfitters are associated (or correlated) with IRONVELD PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRONVELD PLC LS has no effect on the direction of American Eagle i.e., American Eagle and IRONVELD PLC go up and down completely randomly.
Pair Corralation between American Eagle and IRONVELD PLC
If you would invest 0.05 in IRONVELD PLC LS on December 16, 2024 and sell it today you would earn a total of 0.00 from holding IRONVELD PLC LS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Eagle Outfitters vs. IRONVELD PLC LS
Performance |
| Timeline |
| American Eagle Outfitters |
| IRONVELD PLC LS |
American Eagle and IRONVELD PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and IRONVELD PLC
The main advantage of trading using opposite American Eagle and IRONVELD PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, IRONVELD PLC 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 IRONVELD PLC will offset losses from the drop in IRONVELD PLC's long position.| American Eagle vs. GOME Retail Holdings | ||
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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