Correlation Between AM EAGLE and Reinsurance Group
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and Reinsurance Group 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 Reinsurance Group 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 Reinsurance Group of, you can compare the effects of market volatilities on AM EAGLE and Reinsurance Group 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 Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and Reinsurance Group.
Diversification Opportunities for AM EAGLE and Reinsurance Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AFG and Reinsurance is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group 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 Reinsurance Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinsurance Group has no effect on the direction of AM EAGLE i.e., AM EAGLE and Reinsurance Group go up and down completely randomly.
Pair Corralation between AM EAGLE and Reinsurance Group
Assuming the 90 days trading horizon AM EAGLE is expected to generate 41.27 times less return on investment than Reinsurance Group. But when comparing it to its historical volatility, AM EAGLE OUTFITTERS is 1.08 times less risky than Reinsurance Group. It trades about 0.0 of its potential returns per unit of risk. Reinsurance Group of is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 19,614 in Reinsurance Group of on September 1, 2024 and sell it today you would earn a total of 1,986 from holding Reinsurance Group of or generate 10.13% 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. Reinsurance Group of
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| Reinsurance Group |
AM EAGLE and Reinsurance Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and Reinsurance Group
The main advantage of trading using opposite AM EAGLE and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, Reinsurance Group 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 Reinsurance Group will offset losses from the drop in Reinsurance Group's long position.| AM EAGLE vs. AVITA Medical | AM EAGLE vs. EAT WELL INVESTMENT | AM EAGLE vs. Diamyd Medical AB | AM EAGLE vs. CompuGroup Medical SE |
| Reinsurance Group vs. Superior Plus Corp | Reinsurance Group vs. Origin Agritech | Reinsurance Group vs. Identiv | Reinsurance Group vs. INTUITIVE SURGICAL |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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